Kevin Tucker manages a global bond portfolio. At a recent investment committee meeting, Tucker discussed his portfolio’s domestic (very high-credit-quality) government bond allocation with another committee member. The other committee member argued that if the yield curve is expected to remain unchanged, the only determinants of a domestic government bond’s expected return are its coupon payment and its price.

Explain why the other committee member is incorrect, including a description of the additional expected return components that need to be included.