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Answer: 18.7%.

**Calculation:** Holding Period Return (HPY) = (Ending Value + Income - Beginning Value) / Beginning Value Where: - Ending Value = $1,020 (sale price) - Income = $30 + $30 = $60 (two coupon payments) - Beginning Value = $910 (purchase price) HPY = ($1,020 + $60 - $910) / $910 HPY = ($170) / $910 HPY = 0.1868 or 18.68% ≈ 18.7% **Explanation:** The holding period return includes both the capital gain/loss and any income received during the holding period. In this case: 1. Capital gain = $1,020 - $910 = $110 2. Total coupon income = $30 × 2 = $60 3. Total return = $110 + $60 = $170 4. Return relative to initial investment = $170 / $910 = 18.7% Option A (12.1%) would be incorrect if only considering capital gain or miscalculating the income. Option C (6.0%) might be a miscalculation of only one coupon payment or ignoring the capital gain.

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A bond was purchased exactly one year ago for `$910` and was sold today for `$1`,020. During the year, the bond made two semi-annual coupon payments of `$30`. What is the holding period return?

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Last updated: April 1, 2026 at 11:36

12.1%.

18.7%.

6.0%.

Chartered Financial Analyst Level 1

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A bond was purchased exactly one year ago for $910 and was sold today for $1,020. During the year, the bond made two semi-annual coupon payments of $30. What is the holding period return?

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A bond was purchased exactly one year ago for `$910` and was sold today for `$1`,020. During the year, the bond made two semi-annual coupon payments of `$30`. What is the holding period return?