For example, assume Oliver wants to earn a return of 15.75% and is offered the opportunity to purchase a $1,000 par value bond that pays a 13.50% Coupon rate (distributed semiannually) with three years remaining to maturity. The following formula can be used to compute the band's intrinsic value: Intrinske Value - +++++++ Complete the following table by identifying the appropriate corresponding variables used in the equation. Unknown Variable Name Variable Value B $1,000 Semiannual required return Based on this equation and the data, it is value greater than $1,000 to expect that Oliver's potential bond investment is currently exhibiting an intrinsic Now, consider the situation in which Oliver wants to earn a return of 16.5%, but the bond being considered for purchase offers a coupon rate of 13.50%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is Given your computation and conclusions, which of the following statements is true? A bond should trade at a par when the coupon rate is greater than Oliver's required return. When the coupon rate is greater than Oliver's required return, the bond should trade at a premium. When the coupon rate is greater than Oliver's required return, the bond should trade at a discount