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Suppose a seven-year, $1,000 bond with a 9.04% coupon rate and semiannual coupons is trading with a yield to maturity of 6.67%. a. Is this
Suppose a seven-year, $1,000 bond with a 9.04% coupon rate and semiannual coupons is trading with a yield to maturity of 6.67%. 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 7.25% (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.) O A.... at par because the coupon rate is equal to the yield to maturity OB. ... at a premium because the coupon rate is greater than the yield to maturity O C. at a discount because the coupon rate is greater than the yield to maturity OD. ... at a premium because the yield to maturity is greater than the coupon rate
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