Question
16 Bond P is a premium Bond with a coupon rate of 9.8 percent. Bond D is a discount Bond with a coupon rate of
16
Bond P is a premium Bond with a coupon rate of 9.8 percent. Bond D is a discount Bond with a coupon rate of 5.8 percent. Both Bonds make annual payments, have a YTM of 7.8 percent, a par value of $1,000, and have thirteen years to maturity. What is the current yield for Bond P? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield % What is the current yield for Bond D? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Current yield % If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield % If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond D? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Capital gains yield %
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