What Is the Rate of Return on a Bond with a Coupon

question 88

Multiple Choice

What is the rate of return on a bond with a coupon of $38 payable in one year that was purchased for $950 and sold one year later for $931?

• A) 2%
• B) 4%
• C) 6%
• D) 19%

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Definitions:

Quantity Demanded

The overall volume of a good or service that consumers intend and can afford to buy within a specific period at a particular price.

Complementary Good

A product or service that is typically used together with another product, such that an increase in demand for one leads to an increase in demand for the other.

Change in Demand

A change in the quantity demanded of a good or service at at least one price that is caused by factors other than a change in the price of that good or service.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which includes machinery, equipment, methods, and processes.