Consider the two bonds described below:

Bond A

Maturity(years) 15

Coupon rate(%)10

(paid semiannually)

Par Value 1,000

Bond B

Maturity(years) 20

Coupon (%) 6

(paid semiannually)

Par value 1,000

a.If both bonds had a required of 8%,what would the bond's price be?

b.Describe what it means if a bond sells at a discount,at a premium,at its face value (par value).Are these two bonds selling at a discount,premium,or par?

c.If the required return on the two bonds rose to 10%,what would the bond's prices be?