Last year, a company issued a 10-year annual coupon bond at par value with a yield to maturity of 10.40%. The current yield to maturity has Increased to 10.70%. Investors anticipate another increase in yield to maturity over the next 12 months to 11.00%. If the investors forecast accurately, what will be the rate of return on an investment in this bond over the next year?

Answer rating: 100% (QA)

Rate of return 915 Since the bond is issued at par value coupon rat... View the full answer