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Robert paid $1,000 for a 10-year bond with a coupon rate equal to 8 percent when it was issued on January 2. If Robert sold
Robert paid $1,000 for a 10-year bond with a coupon rate equal to 8 percent when it was issued on January 2. If Robert sold the bond at the end of the year in which it was issued for a market price of $925, what re-turn would he earn? What portion of this return represents capital gains, and what portion represents the current yield?
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