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Compute the current price (P 0 ) of a zero coupon bond (par value $1,000) with a maturity of 8 years and the yield to

  1. Compute the current price (P0) of a zero coupon bond (par value $1,000) with a maturity of 8 years and the yield to maturity of 6%. Is the bond trading below par, at par or above par?

  1. What is the price of a 4-year 8% annual coupon bond with a par value of $1,000 and a yield of 8%? Is the bond trading below par, at par or above par?

  1. What is the price of a 4-year 5% annual coupon bond with a par value of $1,000 and a yield of 7%? Is the bond trading below par, at par or above par?

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