A bond$$s credit rating provides a guide to its risk. Suppose that long$-$term bonds rated Aa currently offer yields to maturity of $4\mathrm{.}5\%.$ A$-$rated bonds sell at yields of $4\mathrm{.}8\%.$ Suppose that a $10-$year bond with a coupon rate of $4\mathrm{.}6\%$ is downgraded by Moody$$s from an Aa to A rating.

Is the bond likely to sell above or below par value before the downgrade?

multiple choice $1$

Above par value

Below par value

Is the bond likely to sell above or below par value after the downgrade?

multiple choice $2$

Above par value

Below par value