Question: please show formula and working a. Question 5 (10 marks) Bond P is a 12 percent coupon bond that is selling at a premium. Bond

please show formula and working

a. Question 5 (10 marks) Bond P is a 12 percent coupon bond that is selling at a premium. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments and have a YTM of 9 percent and have 5 years to maturity. What is the current yield for bond P? (2 marks) b. What is the current yield for bond D? (2 marks) If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P? (2 marks) d. If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond D? (2 marks) Explain your answers and the interrelationships among the YTM, the coupon rate and the capital gains yield. (2 marks) C

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