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A Bond That You Held to Maturity Had a Realized

Question 50

Multiple Choice

A bond that you held to maturity had a realized return of 8 percent,but when you bought it,it had an expected return of 6 percent. If no default occurred,which one of the following must be true?


A) The bond was purchased at a premium to par.
B) The coupon rate was 8 percent.
C) The required return was greater than 6 percent.
D) The coupons were reinvested at a higher rate than expected.
E) The bond must have been a zero coupon bond.

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