You are considering purchasing a $1,000 bond with a coupon rate of 9.5 – McqOptions

MCQOPTIONS

1.	You are considering purchasing a $1,000 bond with a coupon rate of 9.5%, interest payable annually. If the current in ation rate is 4% per year, which will continue in the foreseeable future, what would be the real rate of return if you sold the bond at $1,080 after 2 years?
A.	about 9.5%
B.	about 13.26%
C.	about 9.26%
D.	about 8.9%
Answer» E.

Discussion

No Comment Found

Related MCQs

The method of research that gathers data about perceptions, feelings, opinions through interviews and questionnaires in their actual work setting is known as
A method of helping is to understand management and organisational behaviour is to look at that has been done before
De nable groups of people who have an economic and/or social interest in the organisation are called
Governance policies, rules, as well as authority structures apply to which key resource element of the organisation?
Revitalization involves the strategies, resources, technology, and skills of the organisation.
Satisfaction is de ned as positive feelings people have about an organisation whether as a/an
Economic equivalence refers to the fact that a cash ow-whether a single payment or a series of payments-can be converted to an equivalent cash ow at any point in time.
A fund accumulated by periodic deposits and reserved exclusively for a speci c purpose, such as retirement of a debt
A fund created by making periodic deposits (usually equal) at compound interest in order to accumulate a given sum at a given future time for some speci c purpose is sinking fund
The annual equivalent worth (AE) criterion provides a basis for measuring investment worth by determining equal payments on an annual basis.