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Show all work and double-check. Please write it out, ***no excel.*** You purchase a $1,000 face value bond that is paying a coupon rate of

Show all work and double-check. Please write it out, ***no excel.***

You purchase a $1,000 face value bond that is paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has three years until maturity. You hold it for six months when the next coupon is paid and then sell it (immediately after receiving the coupon payment). When you sell it, the market interest rate is still 4% per half-year. What's your HPY?

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