Question text

DESCRIPTION:

Xander buys a bond issued by Lucky Inc at the current market price of $900. The bond pays $100 in interest annually.

INSTRUCTIONS:

Please round your answer to the nearest whole number.

QUESTIONS:

Part A: Suppose the bond price does not change during the year, what is the yield Xander earns on the bond at the end of the year?

Answer: (in %)

Part B: Suppose the bond price increases to $1100 at the end of year, what is yield Xander earns on the bond at the end of the year?

Answer: (in %)