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Determine whether bond #1 below is trading at a premium, at par, or at a discount? Bond No Face Value Redemption Coupon Rate Years to
Determine whether bond #1 below is trading at a premium, at par, or at a discount?
Bond No | Face Value | Redemption | Coupon Rate | Years to Redemption | Yield Rate |
1.1. | $1000 | At Par | j2=8% | 10 | j2=10% |
2.2. | $5000 | At Par | j2=12% | 25 | j2=9% |
3.3. | $2000 | At Par | j2=6.5% | 5 | j2=6.5% |
4.4. | $1000 | At 105 | j2=5% | 10 | j2=5% |
Select one:
a.This bond is trading at a premium.
b.This bond is trading at par.
c.This bond is trading at a discount.
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