问题
单项选择题
| The investor would prefer the municipal bond because the taxable-equivalent yield is greater than the yield on the corporate bond: 6.4%＞6.375%. |
An investor has the following options available to them: They can buy a 10% semi annual coupon, 10 - year bond for $1000. The coupons can be reinvested at 12%. They estimate the bond will be sold in 3 years $1050. Based on this information, what would be the average annual rate of return over the 3 years（）
A. 11.5%.
B. 13.5%.
C. 10.0%.
答案
参考答案：A
解析：
The FV of the coupons and interest on interest: N=3×2=6; I=12/2=6; PMT=50; FV=348.77. The value of the bond at the end of 3 years is given, 1050.00. FV=1398.77(348.77+1050.00), PV=1000, N=6; I=5.75×2=11.5%.