The price of a bond (with par value of $1,000) at the beginning of a period is $980 and at the end of the period is $975. What is the holding-period return if the annual coupon rate is 4.5%?

Name: The price of a bond (with par value of $1,000) at the beginning of a period is $980 and at the end of the period is $975. What is the holding-period return if the annual coupon rate is 4.5%?
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Question

Quizplus · Accepted Answer

HPR = [(975 + 45 − 980)/980] − 1 = 4.08%

The Price of a Bond (With Par Value of $1,000)