Bonds, Instructor's Manual

Current Yield = $90/$1,134.20 = 7.94%. and. Capital Gains Yield = 7.08% - 7.94% = -0.86%. The bond provides a current yield that exceeds the total return, but a purchaser would incur a small capital loss each year, and this loss would exactly offset the excess current yield and force the total return to equal the required rate. g. ................
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