Suppose a firm is issuing 10,000 bonds. Each bond has a face amount of $950, a stated rate of 7.5%, and an 18-year term. When the bonds are issued, the market rate for similar bonds is 6.8%.

Suppose after 8 years an investor decides to sell their bond for $925.

1. What is the yield to maturity after 8 years given the bond price of $925?

1. Based on the yield to maturity you calculated in (5.), is the bond at par, a premium bond, or a discount bond? Why?

1. What is the bond price after the 8th year if the yield to maturity is 7.5%?