You purchase a 8 - year bond for $1,015. It pays a semi-annual coupon payment of $40. You expect to sell the bond in 2 years. You estimate that similar bonds will be priced to yield 7% at the time of the sale. If you can reinvest the coupon payments at 6% annually, what is your expected total return for the 2 - year holding period?

1)

9.23%

2)

5.73%

3)

7.58%

4)

8.71%

5)

6.59%