Principles of Money, Banking & Financial Markets 12th Edition by Lawrence Ritter,William Silber,Gregory Udell

Exercise 6

Again, using the bond described in 4.4, imagine that you purchased the bond and then held it for one year. At the end of that year market interest rates are 5.5 percent and an acquaintance of yours offers to buy the bond for $9,500. Do you sell the bond or do you keep it Either way, calculate your annual rate of return on this bond as if you sold it.