I just need help with the second part of this question. Thank you!!!! Bond P is

Question

I just need help with the second part of this question. Thank you!!!!

Bond P is a premium bond with a 11 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 8 percent, and have four years to maturity. What is the current yield for bond P and bond D? (Round your answers to 2 decimal places. (e.g., 32.16)) Current yield Bond P 10.00 % Bond D 6.40 % If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P and bond D? (Negative amount should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16))) Capital gains yield Bond P % Bond D %

Explanation / Answer

Hi, I answered this question on your other question with the other three problems you had. I was able to figure it out so in case you did not see my answer all you have to do for this problem is subtact the current yield amount from the YTM of 8%.

So for Bond P: 8%-10% = -2.00%

And for Bond D: 8%- 6.40%= 1.60%

Hope this is helpful for you and please rate my answer for this question and the other one I answered from earlier. Thanks!!

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