Question: Suppose you bought a five - year zero - coupon Treasury bond for $ 8 0 0 per $ 1 0 0 0 face value.

Suppose you bought a five-year zero-coupon Treasury bond for $800 per $1000 face value. Assume the yield to maturity on comparable bonds increases to 7% after you purchase the bond and remains there. Calculate your holding period return (annual return) if you sell the bond after one year.

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