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A 20-year fixed coupon bond was issued 5 years ago at par. Since then the bonds yield to maturity has decreased from 10% to 8%.

A 20-year fixed coupon bond was issued 5 years ago at par. Since then the bonds yield to maturity has decreased from 10% to 8%. Which of the following statements is true about the bonds current market price?

a. The bond is selling at a discount

b. The bond is selling at par

c. The bond is selling at a premium

d. The bond is selling at book value

e. Insufficient information

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