What is the total return to an investor who buys a bond for $1,060 when the bond has a 6.75% coupon rate and 3 years remaining until maturity, then sells the bond after 1 year for $1,040? A. 4.57% B. 4.48% C. 5.30% D. 6.75%

What is the total return to an investor who buys a bond for $1,060 when the bond has a 6.75% coupon rate and 3 years remaining until maturity, then sells the bond after 1 year for $1,040? A. 4.57% B. 4.48% C. 5.30% D. 6.75%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 12P: Bond Yields and Rates of Return A 10-year, 12% semiannual coupon bond with a par value of 1,000 may...

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Question

Financial accounting questions

What is the total return to an investor who buys a bond
for $1,060 when the bond has a 6.75% coupon rate and
3 years remaining until maturity, then sells the bond
after 1 year for $1,040?
A. 4.57%
B. 4.48%
C. 5.30%
D. 6.75%

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