An Investor Buys a 10-Year Annual Coupon Bond at a Yield

question 4

Multiple Choice

An investor buys a 10-year annual coupon bond at a yield of 8.7% and sells it 2 years later when it still yields 8.7%.What is his rate of return over this period?

• A) zero.
• B) 8.7%.
• C) Can't say without knowing the coupon.
• D) 17.4%.

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Definitions:

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Highly Stressful Situations

Circumstances that significantly increase stress levels due to perceived or real threats, challenges, or demands.

Correlational Research

A method of data analysis that measures the extent to which two variables are related, without determining cause and effect.

Ethical to Manipulate

The question of whether it's ethical to manipulate refers to the moral implications of influencing someone's behavior or decisions without their informed consent.