Bond P is a premium bond with a 12 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 9 percent, and have five years to maturity. Assume these bonds have a face value of $1,000.

C. What is the current yield of bond P and bond D if interest rates suddenly shifted and the new YTM is 7%?

D. What are the prices of each bond in 4 years assuming the YTM remains 9%? How do the prices of each bond change over time? What direction do the prices move for discount and premium bonds?