Multiple Choice
You buy a bond for $1,000 today that promises interest of $50 in one year plus the return of your principal. However, the probability that the company will default and not pay you either interest nor repay your principal is 1 percent.The expected return on the bond is _____percent.
A) 3.95
B) 4.00
C) 4.95
D) 5.00
Correct Answer:
Verified
Correct Answer:
Verified
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