If yield to maturity of the bond rises to 7 apr with

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Reference no: EM13476030

Suppose a seven-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading with a yield to maturity of 6.75%.

  • a.Is this bond currently trading at a discount, at par, or at a premium? Explain.
  • b.If the yield to maturity of the bond rises to 7% (APR with semiannual compounding), what price will the bond trade for?

Reference no: EM13476030

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