The YTM on a bond is the interest rate you earn on your investment if interest rates don t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). Suppose that two years ago, you bought a bond with an annual coupon rate of 7 percent, priced at $1,160 with 15 years to maturity, and $1000 par value. Since then the YTM of the bond has declined by 1 percent, and you decide to sell. What price will your bond sell for now? What is the HPY on this investment?

		$1,251; 9.8%
		$1,354; 10.2%
		$1,233; 11.2%
		$1,254; 10.5%