Corporate Finance
posted by Nik .
The yieldtomaturity on a bond is the interest rate you earn on your investment if interest rates do not change. If you actually sell the bond before it matures, your realized return is known as the holding period yield. Suppose that today, you buy a 12 percent annual coupon bond for $1,000. The bond has 13 years to maturity. Two years from now, the yieldtomaturity has declined to 11 percent and you decide to sell. What is your holding period yield?
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