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5-year, $1,000,000 bonds, that pay 10% interest are issued. At the time of issuance, the market rate of interest is 8%. For bondholders, what is

5-year, $1,000,000 bonds, that pay 10% interest are issued. At the time of issuance, the market rate of interest is 8%. For bondholders, what is the effective return on this investment?

a. 2%

b. 8%

c. 10%

d. Cannot be determined based on information given

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