Suppose a seven-year, $1,000 bond with a 6.35% coupon rate and
semiannual coupons is trading with a yield to maturity of
4.59%.
Suppose a seven-year, $1,000 bond with a 6.35% coupon rate and semiannual coupons is trading with a yield to maturity of 4.59%. 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 5.55% (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.) A. B. ... at a premium because the yield to maturity is greater than the coupon rate. at a discount because the coupon rate is greater than the yield to maturity at par because the coupon rate is equal to the yield to maturity at a premium because the coupon rate is greater than the yield to maturity C. D. TI b. If the yield to maturity of the bond rises to 5.55% (APR with semiannual compounding), at what price will the bond trade? The bond will trade for $ (Round to two decimal places.)
Suppose a seven-year, $1,000 bond with a 6.35% coupon rate and semiannual coupons is trading with a yield to maturity o
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