What is the holding period yield on your investment, Finance Basics

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What is the holding period yield on your investment

Problem

Suppose you buy an annual coupon bond with a coupon rate of 6% for $915. The bond has 10 years to maturity and a par value of $1000. What rate of return do you expect to ern on your investment? Two years from now the YTM on your bond has declined by one percentage point, and you decide to sell. What is the holding period yield on your investment? Compare this yield to the YTM when you first bought the bond. Why are they different?

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