Let the 'income return' of a bond be the coupon at the end of the period divided by the market price now at the start of the period (C1/P0). The expected income return of a premium fixed coupon bond is:
Let the 'income return' of a bond be the coupon at the end of the period divided by the market price now at the start of the period (C1/P0). The expected income return of a premium fixed coupon bond is: