A 30-year Treasury bond as a face value of $1,000, price of $1,200 with a $50 coupon payment. Assume the price of this bond decreases to $1,100 over the next year. The one-year holding period return is equal to:

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Quizplus · Accepted Answer

The one-year holding period return is calculated as (Coupon Payment + Change in Price) / Initial Price. Here, it is ($50 + ($1,100 - $1,200)) / $1,200 = $-50 / $1,200 = -4.17%.

A 30-Year Treasury Bond as a Face Value of $1,000