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Ferrari NV (RACE) has an issue of 7-year, 8% annual coupon bonds outstanding. The bonds have a face value (FV) of $1,000, a yield-to-maturity (YTM)

Ferrari NV (RACE) has an issue of 7-year, 8% annual coupon bonds outstanding. The bonds have a face value (FV) of $1,000, a yield-to-maturity (YTM) of 10%, and are noncallable.

7. What is the expected one-year capital gain yield on the bonds of Ferrari NV? (hint: YTM is calculated by adding current yield and capital gain yield)

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