Final answer:
The yield of the bond that Tim purchased for $5195 with a face value of $5000 and a 4.6% coupon rate is approximately 4.43%, which is closest to Option D. 4.4%.
Step-by-step explanation:
The student is asking about the yield on a bond that Tim has purchased for $5195 with a face value of $5000. The bond has a 4.6% coupon rate. To calculate the yield, which is the total return on the bond, we must consider the annual interest payment and the price Tim paid for the bond. The annual interest payment would be 4.6% of the $5000 face value, which is $230. Since Tim paid $5195 for the bond, we can calculate the yield as:
Yield = (Annual Interest Payment / Price Paid for Bond) * 100 = ($230 / $5195) * 100 = 4.43%
Therefore, the closest answer to the yield of the bond is Option D. 4.4%.