1. What is the value of a 7% coupon bond with these characteristics? Would we now have a discount or premium bond?
2. What would happen to the values of the 7%, 10%, and 13% coupon bonds over time if the required return remained at 10%? (Hint: With a financial calculator, enter PMT, I/YR, FV, and N; then, change (override) N to see what happens to the PV as it approaches maturity.)

Please show how to solve.