Suppose a 10-year, 5% semiannual coupon bond is selling for $1100. How much would the price of the bond have to drop for it to sell at par value?

Select one:

a. $1,100

b. $0

c. $100

d. $1,000

Suppose a 10-year, 5% semiannual coupon bond is selling for $1100. Since the bonds issue, it is likely that:

Select one:

a. Interest rates have fallen since the bond is selling at a premium.

b. Cannot be determined from the information given

c. Interest rates have risen since the bond is selling at a discount.

d. Interest rates have remained unchanged.