Exhibit 13.11 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Consider two bonds: both pay semiannual interest. Bond X has a coupon of 7 percent per year, maturity of 20 years, yield to maturity of 8 percent per year, and a face value of $1,000. Bond Y has a coupon of 7 percent per year, maturity of 20 years, yield to maturity of 8.5 percent per year, and a face value of $1,000. Refer to Exhibit 13.11. Calculate the percentage gain per invested dollar for Bond Y assuming a one-year horizon and a reinvestment rate of 8.5 percent per year.

a. 8.34 percent

b. 8.18 percent

c. 8.56 percent

d. 7.84 percent

e. 7.97 percent