Three Years Ago You Purchased a Bond for $974

question 73

Multiple Choice

Three years ago you purchased a bond for $974.69.The bond had three years to maturity, a coupon rate of 8%, paid annually, and a face value of $1,000.Each year you reinvested all coupon interest at the prevailing reinvestment rate shown in the table below.Today is the bond's maturity date.What is your realized compound yield on the bond

• A)6.43%
• B)7.96%
• C)8.23%
• D)8.97%
• E)9.13%

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Definitions:

Standard Error

A measure of the variability or dispersion of a sample statistic from the population parameter.

Confidence Interval

A set of values, obtained from sample data, that probably includes the value of an unspecified population parameter, given a certain confidence level.

Point Estimate

A solitary figure or statistical measure employed to approximate the worth of a population parameter.

Confidence Interval

A portfolio of values, extracted from sampling efforts, believed to encapsulate the undiscovered value of a population attribute.