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One bond has a coupon rate of 8%, another a coupon rate of 14%. Both bonds have 10-year maturities and sell at a yield to
One bond has a coupon rate of 8%, another a coupon rate of 14%. Both bonds have 10-year maturities and sell at a yield to maturity of 11.1%. If their yields to maturity next year are still 11.1%, what is the spread between these two bonds' hold-to-maturity rates of return? You may calculate the spread as the higher rate of return minus the lower rate of return.
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