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This problem involves calculating the percentage return on a bond for a 6-month holding period. Let’s break it down step-by-step:

### Given Information:
- Coupon rate: **8%** (annual)
- Par value: **$1,000**
- Yield to maturity (YTM): **7%**
- Time to maturity: **18 years** (at the time of purchase)
- Holding period: **6 months**

### Approach:
1. **Determine the Price of the Bond at the Time of Purchase**:
   The bond price is determined using the formula for bond pricing, where the present value of future cash flows (coupon payments and face value) is discounted using the YTM.

   The formula is:

   \[
   P = \sum_{t=1}^{n} \frac{C}{(1 + YTM/n)^t} + \frac{F}{(1 + YTM/n)^n}
   \]

   Where:
   - $ P $ is the price of the bond,
   - $ C $ is the coupon payment,
   - $ F $ is the face value (par value) of the bond,
   - $ YTM $ is the yield to maturity,
   - $ n $ is the number of periods.

   Since the coupon rate is **8%** of the par value, the annual coupon payment is:

   \[
   C = 0.08 \times 1000 = 80
   \]

   The YTM is **7%** annually.

2. **Calculate the Bond Price for 18 years of Remaining Maturity**:
   The price at purchase will be based on the discounted cash flows of receiving $80 annually for 18 years, plus the $1,000 par value at maturity.

3. **After 6 Months**:
   After 6 months, the bond still has **17.5 years** to maturity. We calculate the new bond price at that time.

4. **Return Calculation**:
   The percentage return is calculated based on:
   
   \[
   \text{Return} = \frac{\text{Coupon Payment} + \text{Change in Price}}{\text{Initial Price}}
   \]

   Let's calculate each step precisely. I'll do that now.The percentage return over the 6-month holding period is **0.0241**, or **2.41%**.

Would you like more details or have any questions?

Here are 5 related questions you might find interesting:
1. How would the return change if the yield-to-maturity decreased after 6 months?
2. What if the coupon bond had a semi-annual payment structure?
3. How do changes in interest rates affect bond prices in general?
4. Can you explain the difference between current yield and yield to maturity?
5. What happens to a bond's price as it approaches maturity?

**Tip**: Always remember that bond prices and yields move in opposite directions. If the yield to maturity rises, the bond price falls, and vice versa.

A 8% coupon bond has a par value of $1,000 and a yield-to-maturity of 7%. You purchase the bond when it has exactly 18 years remaining until maturity. You hold the bond for 6 months, collect the coupon payment, and then sell the bond immediately. If the bond's yield-to-maturity hasn't changed when you sell it, what is your percentage return over this 6-month holding period? DO NOT annualize your answer. Enter your answer as a decimal and show 4 decimal places. For example, if your answer is 6.25%, enter .0625.

Learn how to calculate the percentage return over a 6-month holding period for an 8% coupon bond with a par value of $1,000 and a 7% yield-to-maturity. Detailed step-by-step solution with bond pricing and yield-to-maturity calculations. Suitable for undergraduate finance students.

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