Multiple Choice
Suppose the price of a perpetual bond (i.e., a bond with infinite maturity) is $500 and it pays the holder $25 in interest income annually. What is its interest rate, yield or rate or return?
A) 25%
B) 15%
C) 10%
D) 5%
E) 2%
Correct Answer:
Verified
Correct Answer:
Verified
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