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Bond P is a premium bond with a coupon of 11 percent. Bond D has a coupon rate of 6 percent and is currently selling
Bond P is a premium bond with a coupon of 11 percent. Bond D has a coupon rate of 6 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have eight years to maturity. a. What are the current yields for Bond P and Bond D? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If interest rates remain unchanged, what are the expected capital gains yields over the next year for Bond P and Bond D? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) X Answer is complete but not entirely correct. a. 9.66 % 6.61 X % Bond P current yield Bond D current yield Bond P capital gains yield Bond D capital gains yield b. -1.66 x 1.39 X %
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