Question: An investor buys a newly issued annual bond that pays its coupons once a year. Its coupon rate is 5.5%, its maturity is 15 years,

An investor buys a newly issued annual bond that pays its coupons once a year. Its coupon rate is 5.5%, its maturity is 15 years, and its yield to maturity is 10.75%.

a. At what price did the investor buy the bond?

b. A year later the investor sells the bond when the bond's yield to maturity is 12.26%. What price did the investor sell the bond?

c. What is bonds capital gains return (capital appreciation)?

d. What is the bond's current yield return (income return)?

e. What is the investor's one year holder period return (return)?

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