You purchased an annual interest coupon bond one year ago with six years remaining to maturity...

You purchased an annual interest coupon bond one year ago with six years remaining to maturity at the time of purchase. The coupon interest rate is 10% and the par value is $1,000. At the time you purchased the bond, the yield to maturity was 8%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 7% at the time of sale, your annual total rate of return on holding the bond for that year would have been

a. 7.00%

b. 10.00%

c. 8.00%

d. 9.95%

e. 11.95%

Expert Solution

jeff jeffy answered 1 year ago

You purchased an annual interest coupon bond one year ago with 6 years remaining to maturity at the time of purchase.

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