If a treasury bond can be purchased for $9,450 today and the bond holder will receive $850 in interest and the face value at maturity is $10,000, what is the holding period return (round % to 1 decimal)?

Question

Quizplus · Accepted Answer

The holding period return is calculated as [(Interest + (Face Value - Purchase Price)) / Purchase Price] * 100. Here, it is [(850 + (10,000 - 9,450)) / 9,450] * 100 = 14.8%.

If a Treasury Bond Can Be Purchased for $9,450 Today