Question 16

You purchase a 8-year bond at $95 per $100 par value that pays a 6.2% coupon per annum. Further assume that bond pays coupon semi-annually, and coupons can be reinvested at 3.4% semi-annually for first 6 years. The yield to maturity of a 2-years comparable bond after 6 years is 6%. If you hold the bond for 6 years, what will be your total return?

Please write the answer in four decimal places and NOT PERCENTAGE.