Question

A bond purchased for $950 was sold for $980 after one year. The interest received during the year is $25. The bond's yield is:

Answer 1

Answer : Bond yield - 5.78%

Explanation:-

Since the bond is sold at $980, which was purchased at  $950. So total profit in bond = $30

Also there is $25 interest received during the year.

So total earnings = $25 + $30 = $55

$55 was gained on $950, so bond yield = 5.78%