One year later when yields have fallen to 2 she collects


An investor purchases a bond that matures in 7 years, has a par value of $1,000, and has a 4.5% coupon rate, paid annually. At the time she purchases the bond, the yield to maturity is 3%. One year later, when yields have fallen to 2%, she collects the annual coupon and sells the bond. What is her holding period return for the year?

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Finance Basics: One year later when yields have fallen to 2 she collects
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