What is the current yield for bond

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Reference no: EM131868387

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.

Requirement 1:

What is the current yield for bond P? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Requirement 2:

What is the current yield for bond D? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Requirement 3:

If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

Requirement 4:

If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond D?(Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM131868387

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