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An investor purchased a bond 45 days ago for $985. He received $16 in interest and sold the bond for $980. What is the holding-period return on his investment
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5 votes
An investor purchased a bond 45 days ago for $985. He received $16 in interest and sold the bond for $980. What is the holding-period return on his investment

User UserFog
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1 Answer

5 votes

Answer: 1.11%

Step-by-step explanation:

Holding period return will be calculated as:

= (Selling price + Interest received - purchase price)/purchase price

Where Selling price = $980,

Interest Received = $16

Purchase price = $985

Thus Holding period return = (980+16-985)/985

= 11/985

= 0.0111

= 1.11%

User Syrius
by
5.6k points
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