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17.98% 2.16% 21.55% 3.86% 10.97% A government bond matures in 7 years, makes annual coupon payments of 10.0% and offers a yield of 4% annually

17.98%

2.16%

21.55%

3.86%

10.97%

A government bond matures in 7 years, makes annual coupon payments of 10.0% and offers a yield of 4% annually compounded. Assume face value is $1,000. Now suppose that three years later the bond yields 2%. What return has the bondholder earned over the 36-month period?

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