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Suppose a seven-year, $1,000 bond with a 7.6% coupon rate and semiannual coupons is trading with a yield to maturity of 6.63%. a. Is
Suppose a seven-year, $1,000 bond with a 7.6% coupon rate and semiannual coupons is trading with a yield to maturity of 6.63%. a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.36% (APR with semiannual compounding) what price will the hand teada for? b. If the yield to maturity of the bond rises to 7.36% (APR with semiannual compounding), what price will the bond trade for? The new price of the bond is $ (Round to the nearest cent)
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a To determine if the bond is currently trading at a discount at par or at a premium we compare the ...Get Instant Access to Expert-Tailored Solutions
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