A Bond That Is Currently Selling at $1,000 Offers to Pay

question 47

Multiple Choice

A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate of return on the bond?

• A) 5 percent
• B) 10 percent
• C) 20 percent
• D) 50 percent

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Definitions:

F-test

The F-test is a type of statistical test that determines if there are significant differences between the variances of two or more samples.

Coefficient of Determination

A statistical measure, often denoted as R^2, that represents the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Independent Variables

Variables in an experiment or model that are manipulated or changed to observe their effect on dependent variables.

Total Variation

The overall measure of the spread or dispersion of a set of data points.