A) On September 1, 2023, U.S. manufacturing company XYZ had bonds with 10-year maturity that had default spread of 1.5% above the 10-year US Treasury rate. The bonds paid 5% (annual) coupon rate. On September 1, 2023, did the bonds trade at a price lower/equal/greater than the face value? Underline one of the above options and explain (1 sentence) why.

continuing from question A above: Knowing what happened with Treasury rates since September 1, and assuming that the default spread on bonds of XYZ declined from 1.5% to 1.4%: TODAY, the price of the bonds described above increased/stayed the same/decreased compared to the price on September 1?

Underline one of the above options and explain (1 sentence) why.