Assume That You Purchase a 10-Year $1,000 Par Value Bond,with

Multiple Choice

Assume that you purchase a 10-year $1,000 par value bond,with a 12% coupon,and a yield of 9%.Immediately after you purchase the bond,yields fall to 8% and remain at that level to maturity.Calculate the realized horizon yield,if you hold the bond for 5 years and then sell.Interest is paid annually.

A) 16.25%
B) 12.15%
C) 7.75%
D) 10.05%
E) 9.34%