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Bond P is a premium bond with a coupon rate of 8.6 percent. Bond D is a discount bond with a coupon rate of 4.6
Bond P is a premium bond with a coupon rate of 8.6 percent. Bond D is a discount bond with a coupon rate of 4.6 percent. Both bonds make annual payments, a YTM of 6.6 percent, a par value of $1,000, and have eleven years to maturity. a. What is the current yield for Bond P? For Bond D ? Note: 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? For Bond D? Note: 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
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