Suppose that on January 1, 2018, you purchased a coupon bond with the following characteristics: Face

Question:

Suppose that on January 1, 2018, you purchased a coupon bond with the following characteristics:
• Face value: $1,000
• Coupon rate: 8 3/8
• Current yield: 7.5%
• Maturity date: 2020
If the bond is selling for $850 on January 1, 2019 then what was your rate of return on this bond during the holding period of calendar year 2018?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...