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2) Suppose you purchased a coupon bond that matures in 10 years and has a face value of $1,000 and an annual coupon rate of

2) Suppose you purchased a coupon bond that matures in 10 years and has a face value of $1,000 and an annual coupon rate of 4%. You bought the bond for $950 but sold it one year later for $1100.

  1. Calculate the rate of return for the one-year holding period.
  2. What must have happened during that required you to sell the bond for less than what you paid for it?

Please help. thanks in advance

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