Bond P is a premium bond with a coupon rate of 8 percent. Bond D has a coupon rate of 3 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have seven years to maturity.

What is the current yield for Bond P and Bond D?

If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D, and what is the expected Capital gains yieldfor Bond P and Bond D?