Bond prices and yieldsAssume that the Financial Management Corporation's $1,000-par-value bond has a 5.700% coupon, matures on May 15, 2027, has a current price quote of 97.708 and a yield to maturity (YTM) of 6.034%.

Given this information, answer the following questions:

a.What was the dollar price of the bond?

b.What is the bond's current yield?

c.Is the bond selling at par, at a discount, or at a premium? Why?

d.Compare the bond's current yield calculated in part b to its YTM and explain why they differ.

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Part 1

a.The dollar price of the bond is $ enter your response here. (Round to the nearest cent.)

Part 2

b.The bond's current yield is enter your response here %. (Round to two decimal places.)

Part 3

c.The bond is selling at ---

a premium

a discount

par

because its price is ---

less than

greater than

equal to

the par value.(Select from the drop-down menus.)

Part 4

d.Compare the bond's current yield calculated in part b to its YTM and explain why they differ.

The yield to maturity is

lower

higher

than the current yield because the former includes $22.92 in price

appreciation

depreciation

between today and the May 15, 2027 bond maturity.