At t=0 you buy a bond that has 3 years to maturity and pays annual coupons at a coupon rate of 5% on a par value of $1,000.
At t=0 the bond trades at a yield‐to‐maturity of 10%.
In one year (t=1), you receive the first coupon payment and immediately sell the bond.
At t=1, the bond (with 2 years remaining) still trades at a yield‐to‐maturity of 10%.
What is the per cent capital gain and the per cent net gain from the sale of the bond over the one year period (from t=0 to t=1)?