One year ago, you purchased an annual coupon bond with a coupon rate of 6%, a par value of $1,000 and a maturity of 8 years. At the time of purchase, the yield to maturity was 5%. You received your first annual coupon today and the bond is selling at a yield to maturity of 7%. If you sell this bond today, your annual holding period return will be (approximately)

Select one:

1. -5.50%.
2. 4.18%.
3. -6.86%.
4. 8.95%.
5. -6.18%.