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Bond P is a premium bond with a coupon rate of 8.2%. Bond D is a discount bond with a coupon rate of 5.9%. Both
- Bond P is a premium bond with a coupon rate of 8.2%. Bond D is a discount bond with a coupon rate of 5.9%.
Both bonds make annual payments and have a YTM of 7%, a par value of $1000, and five years to maturity.
What is the current yield for Bond P and Bond D?
If interest rates remain unchained, what is the expected capital gains yield over the next year for Bond P and Bond D?
Explain your answer and the interrelationships among the various types of yields.
Please provide a step-by-step answer without using excel and please provide formulas
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