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3. Harry's Diamond Emporium issued a bond with a 20-year maturity, a $1,000 par value and al0 percent coupon rate with semi-annual payments. Three years

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3. Harry's Diamond Emporium issued a bond with a 20-year maturity, a $1,000 par value and al0 percent coupon rate with semi-annual payments. Three years after the bond was issued, the going rate on similar risk bonds fell to 7 percent. It is expected to stay at this level for the remainder of the bond's life. a. Calculate the current yield and the capital gains yield that the bond will generate in the fourth year (Year 4) of its life

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