One year ago, you purchased a bond with a face value of $1,000 and an annual coupon rate of 8% which had exactly 8 years remaining to maturity. The coupons are paid semi-annually. At the time of purchase, the bond was selling at an effective annual yield to maturity of 6%.

Today, exactly one year after you purchased the bond, the bond is selling at an effective annual yield to maturity of 6.5%.

You reinvested your first semi-annual coupon at an annual nominal rate of 6.25%

If you sell the bond today, your annual total rate of return on holding the bond for the year would have been

a. 3.48%.

b. 5.03%.

c. 2.35%.

d. 5.12%.

e. 4.48%.