Bond P is a premium bond with a coupon rate of 11 percent. Bond D...
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| Bond P is a premium bond with a coupon rate of 11 percent. Bond D has a coupon rate of 6 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have six years to maturity. |
| 1) What is the current yield for bond P and bond D? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Current yield | |
| Bond P | % |
| Bond D | % |
2)
| If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P and bond D? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Capital gains yield | |
| Bond P | % |
| Bond D | % |
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