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A four-year government bond makes annual coupon payments of 4.0% and offers a yield of 2.0% annually compounded. Suppose that one year later the bond

A four-year government bond makes annual coupon payments of 4.0% and offers a yield of 2.0% annually compounded.

Suppose that one year later the bond still yields 2.0%. What return has the bondholder earned over the 12-month period?

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