WHAT IS THE RATE OF RETURN FOR AN INVESTOR WHO PAYS $1,054.47 FOR...

14. What is the rate of return for an investor who pays $1,054.47 for a three-year

bond with a 7 percent coupon and sells the bond one year later for $1,037.19?

Assume the investor can reinvest the coupons at a 9% APR with semi-annual

compounding. The bond pays coupons semi-annually and has a face value of

$1,000.

A) 5.00 percent

B) 5.15 percent

C) 5.30 percent

D) 8.43 percent