Holding Period Yield

A 6% coupon bond was purchased at 101 and matures at par in one year. What is its holding period yield? 4.95% 5.94% 6.00% I am confused as to why the answer is not 6% would appreciate any help.

HPY = (P1-P0+D)/P0 = (100-101+6)/101 = 4,95%

Regards, Oscar

A 6% coupon is the fixed payment that you will receive. What you are looking to find is the rate of return on the bond or the Yield to Maturity. You can calculate it as oskar put above but if that is confusing to you, you can solve it using the TVM caculation using the BA II Plus.


PV= -101

PMT= 6

FV= 100

Answer: CPT I/Y = 4.95%

R u freakin kidding me?