A 45% Annuity Bond of $50 000 with Interest Payable Quarterly

A 4.5% annuity bond of $50 000 with interest payable quarterly is to be redeemable at par in seven years with a yield 6% compounded quarterly. What is the gain or loss if the bond is sold six years after the date of purchase at 99.625?

A) $535.20 Gain
B) $535.20 Loss
C) $4073.76 Gain
D) $4073.76 Loss
E) $916.87 Loss

Correct Answer:

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