USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 12.1. What is the capital gains/loss yield on this bond?
A) -0.038 percent
B) 0.456 percent
C) 0.038 percent
D) -0.456 percent
E) 0 percent

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
 
-Refer to Exhibit 12.1. What is the capital gains/loss yield on this bond?
A) -0.038 percent 
B) 0.456 percent 
C) 0.038 percent 
D) -0.456 percent 
E) 0 percent

Quizplus · Accepted Answer

The capital gains/loss yield is calculated as (ending price - beginning price + coupon payment) / beginning price. Plugging in the numbers from Exhibit 12.1, we get (F1F1F1S1 - F1F1F100 + F1F1F1) / F1F1F100, which simplifies to 0.038, or 0.038%. Therefore, the correct answer is C.