An Investor Buys a 5-Year,9% Coupon Bond for $975,holds It

question 7

Multiple Choice

An investor buys a 5-year,9% coupon bond for $975,holds it for 1 year,and then sells the bond for $985.What was the investor's rate of return?

• A) 9.00%
• B) 9.23%
• C) 9.65%
• D) 10.26%

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Definitions:

Deindividuation

Deindividuation refers to a psychological state where an individual loses self-awareness and a sense of individuality, often leading to uninhibited or norm-defying behavior, usually in group settings.

Anonymous

Describing someone or something that is unnamed or not identified by name, often used to maintain privacy or confidentiality.

Self-Aware

Having conscious knowledge of one's own character, feelings, motives, and desires.

Commons Dilemma

A situation in which individual users acting independently and rationally according to their own self-interest behave contrary to the best interests of a whole by depleting a common resource.