Bond P is a premium bond with a 8 percent coupon. Bond D is a 3 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have ten 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 places. (e.g., 32.16)) Bond P Bond D Current yield 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. Do not round Intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))) Bond P Bond Capital gains yield D
Bond P is a premium bond with a 8 percent coupon. Bond D is a 3 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 5 percent, and have ten 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 places. (e.g., 32.16)) Bond P Bond D Current yield 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. Do not round Intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))) Bond P Bond Capital gains yield D
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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need help on both questions , thank you
Transcribed Image Text:Bond P is a premium bond with a 8 percent coupon. Bond D is a 3 percent coupon bond
currently selling at a discount. Both bonds make annual payments, have a YTM of 5
percent, and have ten 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 places. (e.g., 32.16))
Bond P
Bond
D
Current yield
%
%
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.
Do not round Intermediate calculations and round your final answers to 2 decimal
places. (e.g., 32.16)))
Bond P
Bond
D
Capital gains yield
%
%
Transcribed Image Text:Bart Software has 8 percent coupon bonds on the market with 23 years to maturity. The
bonds make semiannual payments and currently sell for 109.25 percent of par.
a. What is the current yield on the bonds? (Do not round Intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the YTM? (Do not round Intermediate calculations and enter your answer as
a percent rounded to 2 decimal places, e.g., 32.16.)
c. What is the effective annual yield? (Do not round Intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. Current yield
96
b.
Yield to maturity
96
C.
Effective annual yield
96
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