An investor sells 10 5% bonds at a profit and buys another 10 bonds with a 5-1/4% coupon rate. The investor's yearly return will increase by:

An investor sells 10 5% bonds at a profit and buys another 10 bonds with a 5-1/4% coupon rate. The investor's yearly return will increase by:

An investor sells 10 5% bonds at a profit and buys another 10 bonds with a 5-1/4% coupon rate. The investor's yearly return will increase by:



A) $1.50 per bond.

B) $2.00 per bond.

C) $2.50 per bond.

D) $1.00 per bond.


Answer: C) $2.50 per bond.


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