Firm A	Firm B
Price	?	?
Coupon rate	7.5%	7.5%
Maturity	In 5 years	In 3 years
Required rate of return	8.24%	3.2%
Current yield	7.78%	6.98%

(Hint: what is face value for the bond by default)

(i) Calculate the current bond price for the Firm A and Firm B

(ii) Are the bonds trading at a discount or a premium? Why?

(iii) what would happen to bonds prices if YTM for each bond to increase?