Suppose a seven-year, $1,000 bond with a 5.98% coupon rate and semiannual coupons is trading with a yield to maturity of 4.01%. a. Is this bond currently trading at a discount, at par, or at a...

Suppose a seven-year, $1,000 bond with a 5.98% coupon rate and semiannual coupons is trading with a yield to maturity of 4.01%.

a. Is this bond currently trading at a discount, at par, or at a premuim? Explain.

b. If the yield to maturity of the bond rises to 4.37% (APR with semiannual compounding), at what price will the bond trade?

Jun 04, 2022

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