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A bond had a par value of $1000, a time to maturity of 10 years, and a coupon rate of 8.5% with interest paid annually.
A bond had a par value of $1000, a time to maturity of 10 years, and a coupon rate of 8.5% with interest paid annually. If the current market price 8s $850, what will be the approproximate capital gain of this bond over the next year if its yield to maturity remains unchanged? (please go in depth on the math behind this.)
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