Bond P is a premium bond with a 9 percent coupon. Bond D is a 4 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 6 percent, and have four 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 8.15% 4.30 % 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 is a premium bond with a 9 percent coupon. Bond D is a 4 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 6 percent, and have four 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 8.15% 4.30 % 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)))
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 13P
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Bond P is a premium bond with a 9 percent coupon. Bond D is a 4 percent coupon bond
currently selling at a discount. Both bonds make annual payments, have a YTM of 6
percent, and have four 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
Current yield
8.15%
4.30 %
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
-2.15 %
1.70 %
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