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Time remaining: 00:09:48 Economics QUESTION 5 Consider a bond with a face value of $5,000 that pays a coupon of $200 for 5 years. Suppose
Time remaining: 00:09:48 Economics QUESTION 5 Consider a bond with a face value of $5,000 that pays a coupon of $200 for 5 years. Suppose the bond is purchased at $5,000, and can be resold next year for $4,800. What is the rate of return and the yield to maturity of the bond? rate of return = 4%, yield to maturity = 0% rate of return = 0%, yield to maturity = 4% rate of return = 8%, yield to maturity = - 4% rate of return = 4%, yield to maturity = 4 QUESTION 6 Consider a bond with a face value of $1,500 that pays a coupon of $300 for 5 years. Suppose the bond is purchased at $1,000, and can be resold next year at $1,500. What is the rate of return and yield to maturity of the bond? rate of return = 30%, yield to maturity = 80% rate of return = 80%, yield to maturity = 35% rate of return = 3%, yield to maturity = 8% rate of return = 8%, yield to maturity = 3%
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