Question
Bond P is a premium bond with a coupon rate of 8.8 percent. Bond D is a discount bond with a coupon rate of 4.8
Bond P is a premium bond with a coupon rate of 8.8 percent. Bond D is a discount bond with a coupon rate of 4.8 percent. Both bonds make annual payments, have a YTM of 6.8 percent, and have thirteen years to maturity.
Requirement 1: |
What is the current yield for bond P? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
Current yield | % |
Requirement 2: |
What is the current yield for bond D? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
Current yield | % |
Requirement 3: |
If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).) |
Capital gains yield | % |
Requirement 4: |
If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond D? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
Capital gains yield | % |
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