Question: Problem 8-26 Components of Bond Returns Bond P is a premium bond with a 10 percent coupon. Bond D is a 5 percent coupon bond

 Problem 8-26 Components of Bond Returns Bond P is a premium

Problem 8-26 Components of Bond Returns Bond P is a premium bond with a 10 percent coupon. Bond D is a 5 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 7 percent, and have five years to maturity. What is the current yield for Bond P and Bond D? (Do not round intermediate calculations and round your final answers to 2 decimal pleces. (e.g., 32.16)) If interest rates remain unchanged, what is the expected capital gains yleld over the next year for Bond P and Bond D ? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g.. 32.16)))

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