The WSJ lists a bond as Acme 9s13 and the price as 89.875. If your required rate of return is 10%, would you buy one of these bonds in 2001?

Answer :

Yes

Explanation :

A bond in finance may be defined as an instrument of the indebtedness of a bond. It is a fixed income instrument that shows a loan by investors. Bonds may be in mutual funds or in private funding.

Here in the question it is given that WSJ is a company and it listed a bond on the market as Acme 9s13.

The price of the bond 89.875

The rate of return rate will be = 10%

So I will buy the bond of WSJ in the year 2001 as it will give a return of $ 931.00

ans789

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