Question

7. One year ago, you purchased a rare Indian-head penny for $14,000. Because of the
recession and the need to generate current income, you plan to sell the coin and
invest in Treasury bills. The Treasury bill yield now stands at 8 percent, although it
was 7 percent one year ago. A coin dealer has offered to pay you $12,800 for the
coin. Compute the holding period return on this investment.

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