Calculate your annual holding period return

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Suppose you purchase a 3-year, 5-percent coupon bond at par (F=100) and held it for two years. During that time, the interest rate falls to 4%. Calculate your annual holding period return. (Assume that you do not invest the coupon payment at the end of the first year. So At the end of the second year, the cash flow from coupon interest will be 10)

Reference no: EM131186330

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