Multiple Choice
The price of a bond with no expiration date is originally $5,000 and it pays an annual interest payment of $500.If the price of the bond falls to $3,000, then the effective interest rate yield to a new buyer of the bond is:
A) 14.4 percent.
B) 16.6 percent.
C) 11.0 percent.
D) 9.0 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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