Bond P is a premium bond with a coupon rate of 8.6%. Bond D is a discount bond with a coupon rate of 4.6%. Both bonds make annual payments, have a YTM of 6.6%, and have eleven years to maturity.
Requirement 1:
What is the current yield for bond P? (Do not round intermediate calculations. Requirement 2:
What is the current yield for bond D? (Do not round intermediate calculations. Requirement 3:
If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond P? Requirement 4:
If interest rates remain unchanged, what is the expected capital gains yield over the next year for bond D?