Holding period return is 8.000%
Price at the time of purchase=
1000*9.3% 8(1/1.08^10)+1000/1.08^10=1087.231058
Price at the time of sale=
1000*9.3%/8%*(1-1/1.08^9)+1000/1.08^9=1081.209543
Holding period return=
(1081.209543+1000*9.3%)/1087.231058-1=8.0000%
Coupon bonds, also known as bearer bonds or bond coupons, are debt securities with coupons attached that represent semi-annual interest payments. For coupon bonds, there is no record of the purchaser and issuer. The purchaser's name is not even printed on the certificate.
A coupon bond is a debt instrument with a removable piece of paper that can be peeled off the bond itself and taken to a bank or broker to pay interest. These removable pieces of paper are called coupons and represent interest payments to creditors.
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