Question: Bond P is a premium bond with a coupon rate of 10 percent. Bond D has a coupon rate of 5 percent and is currently

 Bond P is a premium bond with a coupon rate of

Bond P is a premium bond with a coupon rate of 10 percent. Bond D has a coupon rate of 5 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 7 percent, and have five years to maturity. a. What is the current yield for Bond P and Bond D? (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 and Bond D? (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.) X Answer is complete but not entirely correct. a. 8.26 X % 5.82 X % Bond P current yield Bond D current yield Bond P capital gains yield Bond D capital gains yield b. -1.26 X % 1.18 X %

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