A 2-year maturity bond with face value of $1,000 makes annual coupon payments of $80 and is selling at face value. What will be the rate of return on the bond if its yield to maturity at the end of the year is?

Rate of return = 9.887%

Explanation:

What will be the rate of return on the bond if its yield to maturity at the end of the year is 6%

New price of the bond = Present value of the final coupon payment + Present value of the maturity amount

New price of the bond = $80 / (1+r) +$1,000 / (1+r)

New price of the bond = $80 / (1+0.06) +$1,000 / (1+.06)

New price of the bond = $80 / (1.06) +$1,000 / (1.06)

New price of the bond = $1,080 / 1.06

New price of the bond = $1,018.87

Rate of return = Coupon + New price - Old price / Initial price

Rate of return = $80 + $1,018.87 - $1,000 / $1,000

Rate of return = $98.87 / $1,000

Rate of return = 0.09887

Rate of return = 9.887%

i think the answer is a. science center.

answer; no individual buyer or seller has any significant impact on the market price;