Bond P is a premium bond with a 10 percent coupon. Bond D is a 4 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 7 percent, and have eight 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))
Current yield
Bond P %
Bond D %
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)))
Capital gains yield
Bond P %
Bond D %