Question: You decided to purchase $ 1 0 0 , 0 0 0 face value worth of Treasury bonds 6 years ago and decided to sell

You decided to purchase $100,000 face value worth of Treasury bonds 6 years ago and
decided to sell them today. The bonds have a coupon rate of 4.2%. They had 25 years left to
maturity a bond-equivalent yield of 3.6% when you purchased them. The current bond-
equivalent yield for 19 year bonds is 4.8%. You re-invested the coupons in 6-month securities
that pay a bond-equivalent yield of 5.0%(annual rate). What is your holding period return?
What is your return stated on a bond equivalent basis (bond equivalent return)?
When you purchased it 6 years ago, the coupon had just been paid before you purchased it.
Also, you just received the coupon payment today before you sell it. i.e. no accrued interest
to worry about

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