Question
Bond P is a premium bond with a 12 percent coupon. Bond D is a 7 percent coupon bond currently selling at a discount. Both
Bond P is a premium bond with a 12 percent coupon. Bond D is a 7 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 9 percent, and have 5 years to maturity.
What is the current yield for bond P and bond D? (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Current Yield | |
Bond P | % |
Bond D | % |
If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P and bond D? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Capital Gains Yield | |
Bond P | % |
Bond D | % |
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