Bond P is a premium bond with a coupon rate of 9.2 percent. Bond D is a discount bond with a coupon rate of 5.2 percent. Both bonds make annual payments, a YTM of 7.2 percent, a par value of $1,000, and have seven years to maturity. a. What is the current yield for Bond P? For Bond D? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Current yield b. Capital gains yield Bond P % % Bond D % %
Bond P is a premium bond with a coupon rate of 9.2 percent. Bond D is a discount bond with a coupon rate of 5.2 percent. Both bonds make annual payments, a YTM of 7.2 percent, a par value of $1,000, and have seven years to maturity. a. What is the current yield for Bond P? For Bond D? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Current yield b. Capital gains yield Bond P % % Bond 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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Pls answer fast.plz I humble request.
Transcribed Image Text:Bond P is a premium bond with a coupon rate of 9.2 percent. Bond D is a discount bond with a coupon rate of 5.2 percent. Both bonds
make annual payments, a YTM of 7.2 percent, a par value of $1,000, and have seven years to maturity.
a. What is the current yield for Bond P? For Bond D?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
b. If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P? For Bond D?
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers
as a percent rounded to 2 decimal places, e.g., 32.16.
a. Current yield
b. Capital gains yield
Bond P
%
%
Bond D
%
%
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