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Solve the following question with the correct formula using a calculator: What is the rate of return for an investor who pays $1,000 for a

Solve the following question with the correct formula using a calculator:

What is the rate of return for an investor who pays $1,000 for a three-year bond with a 7% coupon rate and sells the bond one year later for $1,000?

A) 5% B) 6% C) 7% D) 8% E) none of the above

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