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Suppose a seven - year, $ 1 , 0 0 0 bond with a ( n ) 5 . 5 8 % coupon rate and
Suppose a sevenyear, $ bond with an coupon rate and semiannual coupons is trading with a yield to maturity of
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 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 a discount because the coupon rate is greater than the yield to maturity.
B at par because the coupon rate is equal to the yield to maturity.
C at a premium because the coupon rate is greater than the yield to maturity.
D at a premium because the yield to maturity is greater than the coupon rate.
b If the yield to maturity of the bond rises to 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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