YOU BOUGHT A BOND WITH A 7% ANNUAL COUPON RATE FOUR YEARS AGO WHEN...

15. You bought a bond with a 7% annual coupon rate four years ago when market interest rates for similar bonds was 6%. The bond had an original maturity of 10 years and a par value of $1000. Today, the yield to maturity of the bond has increased to 8% annually. If you sell the bond today, what would be your annual rate of return over the past 4 years? The bond pays coupons semi-annually. Assume coupons are not reinvested. A) 3.50% B) 3.69% C) 7.33% D) 14.77%