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Suppose a seven-year, $1000 bond with an 8% coupon rate and semi-annual couponsistradingwithayieldtomaturityof6.75%. 1. Is this bond currently trading at a discount, at par, or

Suppose a seven-year, $1000 bond with an 8% coupon rate and semi-annual couponsistradingwithayieldtomaturityof6.75%. 1. Is this bond currently trading at a discount, at par, or at a premium? Explain. 2. If the yield to maturity of the bond rises to 7% (APR* with semi-annual compounding),whatpricewillthebondtradefor? *APR=AnnualPercentageRate(thenominalrate

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