Bonds have a coupon rate, A Heights Inc. bonds have a

Bonds have a coupon rate

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Reference no: EM13732257

A Heights Inc. bonds have a coupon rate of 7%, a yield to maturity of 10%, a face value of $1,000, and mature in 10 years. Which of the following statements is MOST correct?

A. an investor who purchases the bond today will earn a return of 7% if he sells the bond after one year.

B. an investor who purchases the bond today will earn a return of 17% per year if he holds the bond until it matures

C. an investor who purchases the bond today will earn a return of 10% if he sells the bond after one year

D. an investor who purchases the bond today will earn a return of 10% per year if he holds the bond until it matures.

Reference no: EM13732257

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