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a four-year corporate bond with a 5% coupon has a z-spread of 125 bps. Assume a flat yield curve with an interest rate for all

a four-year corporate bond with a 5% coupon has a z-spread of 125 bps. Assume a flat yield curve with an interest rate for all maturities of 4% and annual compounding. The bond will most likely sell:

a) close to par

b) at a premium to par

c) at a discount to par

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