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Problem 6-34 Components of Bond Returns [ [LO 2] Bond P is a premium bond with a coupon rate of 8.4 percent. Bond D is
Problem 6-34 Components of Bond Returns [ [LO 2] Bond P is a premium bond with a coupon rate of 8.4 percent. Bond D is a discount bond with a coupon rate of 4.4 percent. Both bonds make annual payments, a YTM of 6.4 percent, a par value of $1,000, and have nine 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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