Question

Find the total return earned by the bond with the characteristics shown in the table. Term to Maturity 3 months: What is the total retum earned by this bond? (Round to the nearest cent as needed.)

Answer 1

The total return earned by this bond is $1000.

Step-by-step explanation:

The total return earned by a bond can be calculated by adding the interest payments and capital gains. In this case, the bond has a 3-month term to maturity. Since the coupon rate is not given, we will assume it is 0%. Therefore, there will be no interest payments on this bond. The total return will therefore only consist of the principal amount. If the principal amount is $1000, then the total return earned by this bond is $1000.