A 10-year, 12.00%, $5,000 bond that pays dividends quarterly can be purchased for $4,456. This means that $4,456 is spent on the bond now. Every quarter, $150.00 is provided to the purchaser as the dividend. After 10 years, $5,000 is given to the purchaser. If the bond is purchased and pays as scheduled, which of the following ranges of effective rate of return will the purchaser receive? 12.00% 12.50%

A 10-year, 12.00%, $5,000 bond that pays dividends quarterly can be purchased for $4,456. This means that $4,456 is spent on the bond now. Every quarter, $150.00 is provided to the purchaser as the dividend. After 10 years, $5,000 is given to the purchaser. If the bond is purchased and pays as scheduled, which of the following ranges of effective rate of return will the purchaser receive? 12.00% 12.50%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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show the step by step solutions and what required it is
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