Really simple question that’s been bugging me for a while… I can’t believe I can’t solve it. Can someone help? Here it is:

Person A purchased an annual bond coupond (par value) and kept it for one year. The coupon’s rate is 5.5% and the residual maturity of the bond is 6 years, and it had a YTM of 8% when it was sold. What is the holding period return?

I’m in the dark with this. Either too simple or too complicated.

If I understand correctly he bought the bond at par (100), sold it at 6 yrs to maturity when interest rate was 8% (consequently at PV=88.4) but received 1 coupon PMT.

Thanks Moosey, but how did you get that number? Can you show me the calculation please? The part that is bugging me the most is the fact that he kept the bond for one year. I can’t seem to remember what calculation to do relating to this part.