The return an investor earns on a bond over a period of time is known as the

Question:

The return an investor earns on a bond over a period of time is known as the holding period return, defined as interest income plus or minus the change in the bond's price, all divided by the beginning bond price.
a. What is the holding period return on a bond with a of $1,000, and a rate of 6 percent if its price at the beginning of the year was $1,050, and its price at the end was $940? Assume interest is paid annually.
b. Can you give two reasons the price of the bond might have fallen over the year?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...