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Holding period return

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Suppose a Midwest Telephone and Telegraph (MTT) Company bond, maturing in 1 year, can be purchased today for $975. Assuming that the bond is held until maturity, the investor will receive $1,000 (principal) plus 6 percent interest (that is, 0.06 3 $1,000 5 $60).

Determine the percentage holding period return on this investment

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Solution Summary

The solution explains how to determine the bond holding period return.

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