Alex Purchased a $1,000 Par Value Bond One Year Ago

question 24

Multiple Choice

Alex purchased a $1,000 par value bond one year ago at a price of $1,008. At the time of purchase, the bond had 14 years to maturity and a 6 percent, semiannual coupon. Today, the bond has a yield to maturity of 6.5 percent. What is his realized yield as of today?

• A) 0.43 percent
• B) 0.86 percent
• C) 1.29 percent
• D) 1.72 percent
• E) 2.60 percent