Expected capital gains yield over the next year for bond

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Reference no: EM131868112

Bond P is a premium bond with a coupon rate of 8.5 percent. Bond D is a discount bond with a coupon rate of 5.5 percent. 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?

What is the current yield for bond D?

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

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

Reference no: EM131868112

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