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15. Bond X is worth $91 today. The bond will mature in one year and pay $100 or $84 with probabilities 0.75 and 0.25, respectively.
15. Bond X is worth $91 today. The bond will mature in one year and pay $100 or $84 with probabilities 0.75 and 0.25, respectively. Assuming the bond pays no cash flows during the year, which of the following is closest to the expected return on the bond? (a) 5.0% (b) 5.5% (c) 6.0% (d) 6.5% (e) 10.0%
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