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Calculate the price of a 30 year, 8 .5% coupon bond with 21 years left to maturity and a market interest rate of 7.5%. Assume

Calculate the price of a 30 year, 8 .5% coupon bond with 21 years left to maturity and a market interest rate of 7.5%. Assume interest payments are semiannual.

a.Is this a discount or a premium bond?

b.Why or why not?

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