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Suppose a seven-year, $1000 bond with 7.8% coupon rate and semiannual coupons is trading with a yield to maturity of 6.45%. a. Is this bond

Suppose a seven-year, $1000 bond with 7.8% coupon rate and semiannual coupons is trading with a yield to maturity of 6.45%.

a. Is this bond currently trading at a discount, at par, or at a premium?

b. If the yield to maturity of the bond rises to 7.14% (APR with semiannual compounding), what price will the bond trade for?

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