Is the bond selling above or below par value

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a) A bond has a current yield of 9% and a yield to maturity of 10%. Is the bond selling above or below par value? Explain.

b) Now suppose the bond in the previous question is selling for 102. What is the bond's yield to maturity? What would the yield to maturity be at a price of 102 if the bond paid its coupons only once per year?  

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Reference no: EM131317022

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