XYZ Corporation issued a 30 year, 7% annual coupon bond five years ago. The current yield to maturity of bonds with similar risk is 6% annually. Assume that the bond was issued at par value ($1,000).

What is the current price of the bond? Is it trading at a premium, discount or at par?

Suppose that interest rates rose to 8% annually, what is the new price of the bond? Is it trading at a premium, discount or at par?

Suppose that interest rates rose to 7% annually, what is the new price of the bond? Is it trading at a premium, discount or at par?