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A bond was purchased at a premium and is now selling at a discount because of a change in market interest rates. If the bond
A bond was purchased at a premium and is now selling at a discount because of a change in market interest rates. If the bond pays a 4% annual coupon, what is the likely impact on the holding-period return if an investor decides to sell now?
A) increased B) decreased C) stayed the same D) The answer cannot be determined from the information given.
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