At t=0, you buy a seven-year, 7 percent coupon security (paid every year) that is valued to

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At t=0, you buy a seven-year, 7 percent coupon security (paid every year) that is valued to yield 6% yearly compounded (YTM = 6% yearly compounded). The presumptive worth of the bond is $1,000. The bond guarantor is the U.S. government (no liquidity hazard).

You are likewise given that your holding period (venture skyline) equivalents to five years (t=T=5 years).

Assume that the market loan fee increments to 6.750 percent yearly accumulated (increment by 75 premise focuses) during the principal year of your buy (inside year 1), and it stays at that level (6.750 percent) for the following six years.

What is your consistently intensified holding period return toward the finish of your venture skyline (t=5) a long time?