Question 1
Nathan bought a zero coupon bond in 2010 for $485.19. In 2020 he redeemed it for $1,000. His internal rate of return on this investment was
◦ 206.1%.
◦ 20.6%.
◦ 7.5%.
◦ 0.00%.
Question 2
The actual return on a bond is dependent upon which of the following?
II. | whether the bond defaults or not |
III. | any changes in par value |
IV. | any changes in market price |
◦ I, II and III only
◦ II, III and IV only
◦ I, III and IV only
◦ I, II and IV only