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Suppose a 1 0 - year, $ 1 , 0 0 0 bond with a coupon rate of 1 0 % and semiannual coupons is

Suppose a 10-year, $1,000 bond with a coupon rate of 10% and semiannual coupons is trading with a yield to maturity of 8.39%.
a. Is this bond currently trading at a discount, at par, or at a premuim? Explain.
b. If the yield to maturity of the bond rises to 8.59%(APR with semiannual compounding), at what price will the bond trade?
a. Is this bond currently trading at a discount, at par, or at a premuim? Explain.
The bond is currently trading (Select the best choice below.)
A. at par because the coupon rate is equal to the yield to maturity.
B. at a premium because the yield to maturity is greater than the coupon rate.
C. at a discount because the coupon rate is greater than the yield to maturity.
D. at a premium because the coupon rate is greater than the yield to maturity.
b. If the yield to maturity of the bond rises to 8.59%(APR with semiannual compounding), at what price will the bond trade?
The bond will trade for $.(Round to two decimal places.)
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