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A 12-year $1,000 par bond with 7% annual coupon (paid annually) is priced to yield 6% (AER), Investors purchasing the bond expect that yields on

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A 12-year $1,000 par bond with 7% annual coupon (paid annually) is priced to yield 6% (AER), Investors purchasing the bond expect that yields on comparable bonds will be 4% two years from now. Calculate the realized rate of return if the bond is actually sold in two years at T2), right after the issuer makes the second coupon payment (note: round any intermediate results to two decimal places)

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