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Bond Holding-Period Return: Calculating Investment Yield

Chapter 10, Problem 12

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QUESTION: You buy an eight-year bond that has a 6% current yield and a 6% coupon (paid annually). In one year, promised yields to maturity have risen to 7%. What is your holding-period return?

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QUESTION: You buy an eight-year bond that has a 6% current yield and a 6% coupon (paid annually). In one year, promised yields to maturity have risen to 7%. What is your holding-period return?

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Given data:

You buy an eight-year bond that has a 6% current yield and a 6% coupon (paid annually).

In one year, promised yields to maturity have risen to 7%.

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Bond Holding-Period Return: Calculating Investment Yield
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Explore the fundamentals of bond investments in this video, focusing on calculating the holding-period return. Learn how changes in yield to maturity can impact your investment returns. Discover the key factors affecting bond prices and make informed investment decisions.


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