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You buy an 7-year $1,000 par value bond today that has a 5.60% yield and a...

You buy an 7-year $1,000 par value bond today that has a 5.60% yield and a 5.60% annual payment coupon. In 1 year promised yields have risen to 6.60%. Your 1-year holding-period return was ___.

Multiple Choice

  • 0.77%

  • –4.83%

  • 1.54%

  • –2.69%

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Answer: 0.77%

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