On December 31st, 2015 you decided to buy a 30 year Government of Canada bond. The bond had a

face value of $100,000. The coupon rate on the bond was 6%. Coupons were paid semi-annually.

On December 31st, 2015 the yield to maturity on Government of Canada bonds was 4% per year.

(The term structure of interest rates was flat.)

After holding the bond for 3 years you decided to sell the bond on December 31

st, 2018. Prior to

selling the bond you received the December 31

st, 2018 coupon payment. On December 31st, 2018

the yield to maturity on Government of Canada bonds increased to 4.5% per year. (The term

structure of interest rates was flat.

how much did you pay for the bond on December 31st 2015? how much did you sell it for on December 31st 2018? what was the effective annual rate or return that you earned on your investment during the 3 years?