Assume That You Purchase a 5-Year $1,000 Par Value Bond,with

Multiple Choice

Assume that you purchase a 5-year $1,000 par value bond,with a 6% coupon,and a yield of 7%.Immediately after you purchase the bond,yields rise to 8% and remain at that level to maturity.Calculate the realized horizon yield if you hold the bond to maturity.Interest is paid annually.

A) 6.0%
B) 7.11%
C) 8.0%
D) 15.25%
E) 8.18%