A 6.08% annual coupon, 22-year bond has a yield to maturity of 6.95%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what is the expected Capital Gains Yield for this bond? Please share your answer as a %.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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Nikul 

A 6.08% annual coupon, 22-year bond has a yield to maturity of 6.95%. Assuming the par value is
$1,000 and the YTM is expected not to change over the next year, what is the expected Capital
Gains Yield for this bond? Please share your answer as a %.
Transcribed Image Text:A 6.08% annual coupon, 22-year bond has a yield to maturity of 6.95%. Assuming the par value is $1,000 and the YTM is expected not to change over the next year, what is the expected Capital Gains Yield for this bond? Please share your answer as a %.
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