Suppose you purchase a bond with a coupon of $30 for $1025. You sell it one year later for $1050. What rate of return did you earn? Report a percentage with two decimal places
What will be an ideal response?
The rate of return is $30/$1025 + ($1050 - $1025)/$1025 = 5.37%.
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Economic models must be tested with data to see if they are correct.
Answer the following statement true (T) or false (F)
An increase in the real wage
A) represents a pure substitution effect. B) represents a pure income effect. C) represents a combination of income and substitution effects. D) causes a parallel shift in the consumer's budget line.
All of the following are problems associated with maintaining a cartel except that:
a. cartels are illegal. b. a large amount of information is needed to coordinate a cartel. c. profits are not maximized by a cartel so it will evolve into a monopoly. d. each member of the cartel has an incentive to "chisel" by expanding output.
If the value of a nation's merchandise exports exceeds merchandise imports, the nation is running a
a. capital account deficit. b. capital account surplus. c. balance of trade surplus. d. balance of trade deficit.