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A bond has the following information: Par value: $1,000 Maturity: seven years Coupon rate: 10.5% with semi-annual coupon payment Yield to maturity: 8.5% Required a)

A bond has the following information:

Par value: $1,000

Maturity: seven years

Coupon rate: 10.5% with semi-annual coupon payment

Yield to maturity: 8.5%

Required

a) Is this bond currently trading at a discount, at par, or at a premium? Explain

b) If the YTM rises to 9%, at what price will the bond trade?

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