A bond pays a return (simple interest) of 5% and has a default rate of 3%. This bond is purchased for $1000.00. What is the expected rate of return for the purchaser?

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 16E: Mortgage What is the monthly payment on a 30-year mortgage of $80,000 at 9% interest? What is the...
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A bond pays a return (simple interest) of 5% and has a default rate of 3%. This bond is purchased for $1000.00. What is the expected rate of return for the purchaser?

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