Question: Suppose that James just bought the same bond that Joan bought, but he bought it two years later for $ 1 , 0 3 4

Suppose that James just bought the same bond that Joan bought, but he bought it two years later for $

1, 034.55 .

If James plans to hold his bond for five years and its YTM does not change during that period, what return will he earn each year? What portion of the annual return represents capital gains and what portion represents the current yield?

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