You purchase a bond today for $900 that has a 5% coupon rate, paid semi-annually, and has 10 years to maturity. The face value of the bond is $1,000. One year later you sell the bond at a yield to maturity of 4.75%

Calculate the Holding Period Return (HPR) (as a %) over the one year that you held the bond.

Do you think interest rates (or the YTM) increased or decreased over the one year period that you held the bond? Explain briefly.

When you purchased the bond for $900 initially, do you think the YTM was greater or less than the coupon rate? Explain briefly

You purchase a bond today for $900 that has a 5% coupon rate, paid semi- annually, and has 10 years to maturity. The face value of the bond is $1,000. One year later you sell the bond at a yield to maturity of 4.75% 1. Calculate the Holding Period Return (HPR) (as a %) over the one year that you held the bond. 2. Do you think interest rates (or the YTM) increased or decreased over the one year period that you held the bond? Explain briefly. 3. When you purchased the bond for $900 initially, do you think the YTM was greater or less than the coupon rate? Explain briefly