A bond is issued with a $500 face value, a 2% yield, and a maturity of 1 year. If an investor purchases the bond at face value and holds it until the bond's maturity date, how much should the bondholder expect to receive in payment?(1 point) Responses $10 10 dollars $0 0 dollars $510 510 dollars $500

Answer 1

If the bond has a face value of $500 and a yield of 2%, the bondholder will receive the face value at maturity plus the interest earned.

The interest earned in one year would be calculated as follows:
Interest = Face Value × Yield
Interest = $500 × 0.02 = $10

At maturity, the bondholder will receive the face value plus interest:
Total payment = Face Value + Interest
Total payment = $500 + $10 = $510

Therefore, the bondholder should expect to receive $510.