The buy-and-hold investor purchases the 10-year bond at 85.503075 and holds the security until it matures. After the bond is purchased and before the first coupon is received, interest rates go down to 9.40%. The future value of reinvesting the coupon payments at 9.40% for 10 years is 123.888356 per 100 of par value.

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[8x (1.0940)⁹] + [8×(1.0940)8] + [8 × (1.0940)7] + [8×(1.0940)6] + [8x (1.0940)5] + [8x (1.0940)4] + [8x (1.0940)³] + [8× (1.0940)²] + [8x (1.0940)¹] + 8 = 123.888356