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Bond P is a premium bond with a coupon rate of 8.7 percent. Bond D is a discount bond with a coupon rate of 4.7 percent. Both bonds make annual payments, have a YTM of 6.7 percent, and have twelve 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).) Current yield 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).) Current yield Requirement 3: 1% 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).) Capital gains yield 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).) Capital gains yield %

Bond P is a premium bond with a coupon rate of 8.7 percent. Bond D is a discount bond with a coupon rate of 4.7 percent. Both bonds make annual payments, have a YTM of 6.7 percent, and have twelve 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).) Current yield 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).) Current yield Requirement 3: 1% 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).) Capital gains yield 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).) Capital gains yield %

Essentials Of Investments
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
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Need help finding the current yield for both bond P and D, & the capital yield gains for both bonds P and D. Thank you in advance 

Bond P is a premium bond with a coupon rate of 8.7 percent. Bond D is a discount bond with a coupon rate of 4.7 percent. Both bonds make annual payments, have a YTM of 6.7 percent, and have twelve 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).) Current yield 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).) Current yield % 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).) Capital gains yield 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).) Capital gains yield %
Transcribed Image Text:Bond P is a premium bond with a coupon rate of 8.7 percent. Bond D is a discount bond with a coupon rate of 4.7 percent. Both bonds make annual payments, have a YTM of 6.7 percent, and have twelve 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).) Current yield 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).) Current yield % 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).) Capital gains yield 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).) Capital gains yield %
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