answer:I don’t have my formulas at hand to calculate it, but if the interest rate has gone down since the bonds were bought, and you sell them now, you will lose money, your rate of return will be negative. You have to figure out what the price paid for each of the bonds, and then calculate what the prices would be now. You have a value that will be returned at maturity ($1000) and a stream of coupons at 7%, but the increase in interest rates will reduce the current price.