10. Holding Period Yield (HPY) – is the average rate of return you earn per year if you buy a bond and then sell it before it matures. A $1,000 face value bond, 6% coupon, 3-year maturity is available for purchase today at a price of $852.48. Interest is paid semi-annually. You purchase the bond and sell it 1 year later for $900? During the year you received 2 interest payments. What is your holding period yield? 11. Determining Realized Rate of Return Union Corporation's 30-year bonds currently pay an annual interest payment of $100.00 per every $1,000 face value. Bonds are currently selling at par. Assume you purchase $10,000 of Union bonds at today's market price. Time passes and at the end of 1 year, the bond's are selling at 105 (which means 105% of par). If you sell the bonds in one year, what is your annual rate of return on this investment?

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