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Last year, you purchased a zero-coupon bond for $256.00 and a coupon bond for $1,075. The coupon bond has a 6% coupon rate, paid semiannually.

Last year, you purchased a zero-coupon bond for $256.00 and a coupon bond for $1,075. The coupon bond has a 6% coupon rate, paid semiannually. When you bought it, the zero had a $1,000 par value, 20 years to maturity, and a 6.75% yield to maturity (assume semiannual compounding for the zero). Currently, the zero has a yield to maturity of 6.5% and the coupon bond currently sells at par. Assuming you received both semiannual coupon payments from the coupon bond during the period, what is your holding period return (i.e., percentage return) on your portfolio? Show and label your work and/or show your calculator steps.

(please do not complete in Excel)

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