A bond has a current market value of $800. The holder of the bond will
A bond has a current market value of $800. The holder of the bond will receive a single payment of $1,000 one year from now. The interest rate is 10 percent. The effective yield on the bond is:
A) $200.
B) 10 percent.
C) 25 percent.
D) negative.
E) The yield cannot be determined with the information provided.
ANSWER
C
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