Problem $7-29$ Components of Bond Returns $($LO$2)$

Bond $P$ is a premium bond with a $10\%$ coupon. Bond $D$ is a $4\%$ coupon bond currently selling at a discount. Both bonds make annual

payments, have a YTM of $7\%,$ and have eight years to maturity.

If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond $P$ and bond $D?($Negative

answers should be indicated by a minus sign. Round the final answer to $2$ decimal places.$)$

Capital Gains Yield

Bond $P$

x $\%$

Bond D

x $\%$