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3. (20 points) You bought a 4-year bond with 10% coupon rate and $1,000 face value is offering a 9% current yield today, exactly two

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3. (20 points) You bought a 4-year bond with 10% coupon rate and $1,000 face value is offering a 9% current yield today, exactly two years after its issue date. If the market rate is expected to stay the same for the foreseeable future, a) What is the yield on this bond today? b) What would be the capital gains rate from this year to next year

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