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A 7-year government bond makes annual coupon payments of 5.6% and offers a yield of 3.6% annually compounded. Assume face value is $1,000. Note: Do

image text in transcribed A 7-year government bond makes annual coupon payments of 5.6% and offers a yield of 3.6% annually compounded. Assume face value is $1,000. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Suppose that one year later the bond still yields 3.6%. What return has the bondholder earned over the 12-month period? b. Now suppose that the bond yields 2.6% at the end of the year. What return did the bondholde earn in this case

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