1. An investor purchases a 11-year, 7.2% annual coupon payment bond at a price equal to par value. After the bond is purchased and before the first coupon is received, interest rates increase by 1%. The investor sells the bond after 3 years. Assume that interest rates remain unchanged at 7.2+1.1% over the 3-year holding period.

Assuming that all coupons are reinvested over the holding period, what is the investors 3-year horizon yield?