Kim Back Invested $20,000 One Year in Corporate Bonds

question 25

Multiple Choice

Kim Back invested $20,000 one year in corporate bonds. Each bond sold for $1,000 and earned a coupon payment of $80 each during the year. The price of the bond at the end of the year dropped to $980. Which of the following is Kim's investment percent return on each bond?

• A) −2%
• B) 6%
• C) 4%
• D) −6%

---

Definitions:

Leaning

The act or state of inclining towards something or someone, either physically or metaphorically, indicating a preference or tendency.

Favorably Disposed

Having a positive or supportive inclination towards someone or something.

Message

Information, ideas, or feelings that are conveyed from one entity to another through various forms of communication.

Nonverbal Indicator

A form of communication without the use of spoken language, involving gestures, facial expressions, and body language to convey information or feelings.