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You estimated expectations and collected the following data for Tom and Jerry Corporation Investment horizon (years) 1.0 Coupon (annual) 45$ Notional 1000$ Current price 930

You estimated expectations and collected the following data for Tom and Jerry Corporation

Investment horizon (years)

1.0

Coupon (annual)

45$

Notional

1000$

Current price

930

Expected price after 1 year (assuming no change in yield curve)

950

Average modified duration for portfolio

5,2

Expected convexity for portfolio

35

Expected change in government yield curve

-0,3%

Expected credit loss

0,4%

Expected currency loss

0,07%

Please, calculate expected return of Tom and Jerry Corporation during your investment horizon.

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