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1. Calculate the rate of capital gain or loss on a 10-year zero-coupon bond for which the interest rate has increased from 10% to 20%.

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1. Calculate the rate of capital gain or loss on a 10-year zero-coupon bond for which the interest rate has increased from 10% to 20%. The bond has a face value of $1,000. 2. A pension fund manager is holding a 10-year 10% coupon bond in the fund's portfolio, and the interest rate is currently 10%. What loss would the fund be exposed to if the interest rate rises to 11% tomorrow? 3. What is the expected return on the Exxon-Mobil bond if the return is 12% two-thirds of the time and 8% one- third of the time

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