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Bond P is a premium bond with a coupon rate of 9 percent. Bond D has a coupon rate of 4 percent and is selling
Bond P is a premium bond with a coupon rate of 9 percent. Bond D has a coupon rate of 4 percent and is selling at a discount. Both bonds make annual payments, have a YTM of 6 percent, and have nine years to maturity. a. What is the current yield 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 is the expected capital gains yield 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. Bond P 7.47 % Bond D 4.63 % -16.95 X % b. Bond P Bond D 15.75 X %
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