Question $1$

$10pts$

A $10-$year, $9\mathrm{.}00\%,$$$4,000$ bond that pays dividends quarterly can be purchased for $$3,491.$

This means that $$3,491$ is spent on the bond now. Every quarter, $$90\mathrm{.}00$ is provided to the purchaser as the dividend.

After $10$ years, $$4,000$ is given to the purchaser.

If the bond is purchased and pays as scheduled, which of the following ranges of effective rate of return will the purchaser receive?

$11\mathrm{.}00\%-12\mathrm{.}00\%$

$12\mathrm{.}01\%-14\mathrm{.}01\%$

$9\mathrm{.}50\%-10\mathrm{.}75\%$

$9\mathrm{.}00\%-9\mathrm{.}50\%$