A $1,000 bond has a market price of $1,100. Over the next three years, an analyst forecasts a time effect of -$22, yield change effect of -$60, coupons of $270, and interest on coupons of $41. Its overall rate of return

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The overall rate of return can be calculated by considering the initial investment, the forecasted changes, and the income from the bond. The initial investment is $1,100 (market price). The forecasted changes include a time effect of -$22, a yield change effect of -$60, coupons totaling $270, and interest on coupons of $41. Adding these together: -$22 - $60 + $270 + $41 = $229 net gain. The rate of return is then calculated as the net gain divided by the initial investment: $229 / $1,100 = 20.8%.

A $1,000 Bond Has a Market Price of $1,100