Problem:
You have a bond of Guzman, Martinez and associates. Its price is $1500, years to maturity 10 years yield to maturity 8% and coupon rate 6% annually. As soon as you buy it, rates become 10% and remain there till you sell it. After you own it for 3 years, you sell it at the time that rates are 14%.
Required:
Question: Find the price as well as the realized compound yield/ true rate of return that you made over that 3 year period.
Note: Provide support for your underlying principle.