What Is the Holding Period Return for the Year on a Bond

question 37

Multiple Choice

What is the holding period return for the year on a bond with a par value of $1,000 and a coupon rate of 8.5% if its price at the beginning of the year was $1,215 and its price at the end of the year was $1,020? Assume interest is paid annually.

• A) -11.00%
• B) -10.78%
• C) -9.05%
• D) 10.50%

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Definitions:

Extrinsic Motivation

Motivation that arises from external rewards or consequences rather than from the enjoyment of the task itself.

Peak Experience

A moment of intense joy, creativity, or satisfaction, often leading to a feeling of transcendence.

Self-Determination Theory

A psychological theory focused on motivation, proposing that people have innate psychological needs that are the basis for self-motivation and personality integration.

Innate Tendency

Natural instincts or inclinations present at birth and not acquired through learning.