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Consider a semiannual 8% coupon bond with a $1,000 face value that has 6 years to maturity. (a) Calculate the market price of this bond

Consider a semiannual 8% coupon bond with a $1,000 face value that has 6 years to maturity.

(a) Calculate the market price of this bond using a yield to maturity (YTM) of 6.6%. Is this bond a premium, par or discount bond?

(b) What would happen to the price of this bond if its risk increased? Explain your answer.

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