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2. a. Price an Italian government bond with a 3.0% coupon rate and 15 years to maturity. The yield to maturity on similar bonds is

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2. a. Price an Italian government bond with a 3.0% coupon rate and 15 years to maturity. The yield to maturity on similar bonds is 4.0%. b. Compute the bond current yield. c. Compute the bond price one year later and the capital gains rate d. Show the relationship between the current yield, the capital gains rate and the yield to maturity

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