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You have a one-year investment horizon and want to choose among three bonds. All three bonds have the same default risk, mature in 10 years,

You have a one-year investment horizon and want to choose among three bonds. All three bonds have the same default risk, mature in 10 years, and have a face value of $1,000. The first is a zero-coupon bond. The second has an 8% coupon rate (paid annually). The third has a 10% coupon rate (paid annually). a) If all three bonds are now priced to yield 8% to maturity, what are their prices? b) If you expect their yields to maturity to be 8% at the beginning of next year, what will their prices be then? What is your rate of return on each bond over the one-year holding period?

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