You purchased a bond 69 days ago for $891.26. You received an interest payment of $24.00 56 days ago. Today the bond’s price is

Question

3 years ago

15

$884.89. What is the holding period return (HPR) on the bond as of today?

1 answer:

inna [77] · Answer 1 · 2022-08-12T11:37:23+03:00

Answer:

1.97%

Explanation:

The formula to calculate the holding period return is:

HPR=(Income generated+(ending value-initial value)/Initial value)*100

Income generated= $24

Ending value= $884.89

Initial value= $891.26

HPR=(24+(884.89-891.26)/891.26)*100

HPR=(24+(-6.37)/891.26)*100

HPR=(17.63/891.26)*100

HPR=0.0197*100

HPR= 1.97%

According to this, the holding period return (HPR) on the bond as of today is 1.97%.