Question $9$

You would like to buy a monthly compounding $15-$year, $$1,000$ par value bond. The yield to

maturity of this bond is $12$ percent. If the annual coupon rate of the bond is an $8\mathrm{.}5$ percent,

what is the value of this bond? Is this bond selling at discount or premium?

$$757$; Discount

$$1,296$; Premium

$$1,225$; Premium