One year ago you bought a 5-year 8% coupon bond that will pay $1,000 at maturity (its par value). The bond was priced at $924.18 to yield 10% and pays interest annually at the end of each year. Now, one year later, (after the first interest payment), the bond is priced to yield 9%. What was your holding period return for the one year?

One year ago you bought a 5-year 8% coupon bond that will pay $1,000 at maturity (its par value). The bond was priced at $924.18 to yield 10% and pays interest annually at the end of each year. Now, one year later, (after the first interest payment), the bond is priced to yield 9%. What was your holding period return for the one year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 5P

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