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    One-year holding period return sample question

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    A $1,000 par value, 6-year bond pays $100 of interest annually. It is priced at $1,314.53. Assume that one year from now rates have dropped by 1% (for example, from 15% to 14%). What would be an investor's one-year holding period return if she purchased the bond today and sold it one year from today?

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