The realized return on a bond is based on only two factors (according to the cfa books). 1. Actual reinvestment rates and the yield curve at the end of the holding period.
My question is why wouldn’t Interest rate volatility play a role in total return since higher volatility affects the actual reinvestment rate and why wouldn’t the yield curve during the duration of holding the bond matter vs just at the end of the holding period ?
If you know the entire yield curve at the end of the period, you can calculate the selling price of the bond, because the relationships between bond prices and and interest rates is pretty straightforward right?
Now you can see your realized return as like the holding period return, it doesn’t matter if the path followed by the yield curve as long as the end result is the same (the moment you would be selling the bond)