Two years ago, you acquired a 10-year zero coupon, $1,000 par value bond at a 12 percent

Question:

Two years ago, you acquired a 10-year zero coupon, $1,000 bond at a 12 percent YTM. Recently, you sold this bond at an 8 percent YTM. Using semiannual compute the annualized horizon return for this investment.

Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will... 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,...