Bond P is a premium bond with a 12 percent coupon. Bond D is a 7 percent coupon
ID: 2704321 • Letter: B
Question
Bond P is a premium bond with a 12 percent coupon. Bond D is a 7 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 9 percent, and have seven 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))
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)))
What is the current yield for bond P and bond D? (Round your answers to 2 decimal places. (e.g., 32.16))
Explanation / Answer
bond