A Bond Has a Par Value of $1,000,a Time to Maturity

question 68

Multiple Choice

A bond has a par value of $1,000,a time to maturity of 10 years,and a coupon rate of 8% with interest paid annually.If the current market price is $750,what is the approximate capital gain yield of this bond over the next year?

• A) 0.7%
• B) 1.8%
• C) 2.5%
• D) 3.4%

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