What is the expected capital gains yield over the next year


Bond P is a premium bond with a coupon rate of 10 percent. Bond D has a coupon rate of 5 percent and is currently selling at a discount. Both bonds make annual payments, have a YTM of 7 percent, and have ten years to maturity. What is the current yield for Bond P and Bond D? If interest rates remain unchanged, what is the expected capital gains yield over the next year for Bond P and Bond D?

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Financial Management: What is the expected capital gains yield over the next year
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