Abigail purchases a 5-year, 10,000 bond that pays 3.5% annual coupons and matures at par. She pays 6,000 for the bond and also deposits the coupons into an account which earns 7.5% interest. What is her total yield rate on the 6000 investment once the bond matures

the total yield rate on 6,000 investment is 14.9328%

Explanation:

The computation of the total yield rate is as follows:

= ((Annual coupon rate × bond ÷ interest earned percentgae × (1 + interest earned percentage - 1) + bond) ÷ (bond))^(1 ÷ time period) -1

= ((3.5% × 10,000 ÷ 7.5% × (1.075^5 - 1) + 10,000) ÷ (6,000))^(1 ÷ 5) - 1

= 14.9328%

Hence, the total yield rate on 6,000 investment is 14.9328%

The same is to be considered

d. low interest rates

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.