Kim Baek invested $20,000 for a year in corporate bonds. Each bond sold for $1,000 and earned

Question:

Kim Baek invested $20,000 for a year in corporate bonds. Each bond sold for $1,000 and earned a coupon payment of $80 each during the year. The price of the bond at the end of the year has dropped to $980.

a. Calculate Kim's investment return.

b. Calculate Kim's total dollar gain or loss on his investment?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...