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One bond has a coupon rate of 8%, another a coupon rate of 12%. Both bonds have 10 year maturities and sell at a yield
One bond has a coupon rate of 8%, another a coupon rate of 12%. Both bonds have 10 year maturities and sell at a yield to maturity at 10%. If the yield to maturity next year are still 10%, what is the rate of return on each bond? Does the higher coupon bond give a higher rate of return?
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