Mega Co. has issued two different bonds with 10 years to maturity and par value of $1000. Bond J is a premium bond with a coupon rate of 9 percent. Bond K has a coupon rate of 5 percent and is currently selling at discount. Both bonds make annual payments and have a YTM of 7 percent. 1. Calculate the current yield of Bond J and Bond K. 2. If the interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond J and Bond K?