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You buy a bond with a face value of $100 at a price of 99.15. It has a YTM of 3.4% and a three-year maturity.
You buy a bond with a face value of $100 at a price of 99.15. It has a YTM of 3.4% and a three-year maturity. Semiannual coupon payment. The second to the last coupon on the bond is worth $1.3145 at the end of your holding period. How much of the holding period return comes from coupons, how much comes from the reinvestment of coupons, how much comes from capital gains or losses and how much is due to the return of principal?
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