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The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price of

The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price of the bond then rises by $200, what will be the interest rate yield to a new buyer of the bond?

Multiple Choice

  • 10 percent
  • 6.3 percent
  • 15 percent
  • 18.8 percent
  • 12.5 percent

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