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8) You buy the new 7-year UST at par. The coupon rate is 4%. You project that 1 year from u project that 2 years

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8) You buy the new 7-year UST at par. The coupon rate is 4%. You project that 1 year from u project that 2 years from today the 5-year today, the 6-year UST yield will be 5%. And yo UST yield will be 6%. a.) What is your projected total rate of return for the 1-year and 2-year horizon holding periods? Your best guess is that your interest income can be reinvested at an annual rate of 5%. Interest is paid semiannually, and par is $1,000. (Something to think about: how did you produce your interest rate forecast?)

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