Suppose you buy a 7% coupon bond today for $960. The bond has a face value of $1,000, and has 18 years until maturity, and pays interest semi-annually. You hold the bond for five (5) years and then you decide to sell it. When you sell the bond the YTM has increased by 100 basis points (1%).
What is the realized yield on your investment?
Please also show:
The expert examines the realized yield on an investment of bonds.