[Solved] A Bond Was Purchased at a Premium and Is Now

Question 90
Multiple Choice

A bond was purchased at a premium and is now selling at a discount because of a change in market interest rates.If the bond pays a 4% annual coupon,what is the likely impact on the holding period return in an investor decides to sell now?

A) Increased
B) Decreased
C) Stayed the same
D) Can not be determined

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