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Ardita Prifti is interested in purchasing bonds from VanCanada Airlines. The 25-year bonds are $1,000 at 4% interest paid semi-annually. The yield to maturity on

Ardita Prifti is interested in purchasing bonds from VanCanada Airlines. The 25-year bonds are $1,000 at 4% interest paid semi-annually. The yield to maturity on the bonds is 5 percent annually.

Required:

Compute the price of the bonds. Is the bond sold at a premium or discount?

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