$12.+$A$96$:S$105$ B You have just purchased a $15-$year $7\%$ coupon bond, payable annually, with a $$1,000$ face value at the price for the $8\%$ YTM$.$ What will be the rate of return if you hold this bond for one year receiving one$-$year coupon,

and then you sell it next year? Assume that the yield of the bond decreases to $7\mathrm{.}5\%$ for one year. Hint: get the purchase price $($Pt$)$ of the bond and then apply Rt $=($Pt$+1-$ Pt $+$ AC$)/$Pt$,$ where Pt$+1$ is the price next year.

m $=1$ N $=$ m$*$Year $15$ I $=$ YTC$/$m $?$ PV $=???$ PMT $=$ AC$/$m $?$ FV $=1000$ END$/$BGN$=?$

$?$

#N$/$A

m $=?$ N $=?$ m$*$Year $?=?$ YTC$/$m $?$ PV $=???$ PMT $=$ AC$/$m $?$ FV $=?$ END$/$BGN$=?$

$?$

#N$/$A

Thus, rate of return $=?$