An Investor Has Three Sources of Dollar Returns from a Bond

question 7

Multiple Choice

An investor has three sources of dollar returns from a bond investment. Which of the following is NOT included among the three sources?

• A) The semi-annual coupon payments.
• B) The interest earned on reinvesting the coupon payments.
• C) The principal paid at maturity.
• D) The interest earned on reinvesting the last coupon and the principal.

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Definitions:

Cooling-Off Rule

A regulation that gives consumers a set period of time to cancel a contract or purchase without penalty, intended to protect consumers from high-pressure sales tactics.

Punitive Damages

Monetary compensation awarded to an injured party that goes beyond what is necessary to compensate the individual and is intended to punish the wrongdoer.

Federal Statutory Regulation

Laws enacted by the United States Congress that are designed to regulate specific areas of American life.

Internet

A global network of computers that provides a wide range of information and communication facilities.