David Rawlings pays $1,000 to buy a five year Treasury bond that pays a 6 coupon rate (for simplicity, assume annual coupon payments) One year later, the markets required return on this bond has increased from 6 to 7 What is Rawlings total return (in dollar and percentage terms) on the bond ...

After one year the bond price will fall to 96613 The total dollar return is ...

David Rawlings pays $1,000 to buy a five-year Treasury bond that pays a 6% coupon rate (for

Question:

David Rawlings pays $1,000 to buy a five-year Treasury bond that pays a 6% rate (for simplicity, assume annual payments). One year later, the market’s required return on this bond has increased from 6% to 7%. What is Rawlings’ total return (in dollar and percentage terms) on the bond?
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...