A bond that pays coupons annually is issued with a coupon rate of 4%, maturity of 3 years, and a yield to maturity of 7%.

. A bond that pays coupons annually is issued with a coupon rate of 4%, maturity of 3 years, and a yield to maturity of 7%. What rate of return will be earned by an investor who purchases the bonds and holds it for 1 year if the bond’s yield to maturity at the end of the year is 8%?

YTM (Yeild to Maturity) = {I + (F+P)/n}/(F+P)/2Where ,I is the coupon rate or interest rate,4%F is the redemption or Par value,100P is the current price, ?N is the term of years to...