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A 10-Year $5000 Bond Redeemable at Par,is Purchased by Ms

Question 41

Multiple Choice

A 10-year $5000 bond redeemable at par,is purchased by Ms.Gates that pays coupons at j2 = 6%.She purchases the bond for $3753.78 to yield j2 = 10%.She then immediately sells all of the coupons to another investor at a price of $2038.55.What rate of return,j2 does Ms.Gates earn on her investment?


A) 11.29%
B) 10.99%
C) 10.00%
D) 8.00%

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