Calculate the market price of this bond

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Reference no: EM133629972

Consider a semiannual 4.0% coupon bond with a $1,000 face value that has 3 years to maturity.

1. Calculate the market price of this bond using a yield to maturity (YTM) of 3.0%. Is this bond a premium, par or discount bond?

2. In general terms, explain the relationship between bond price, coupon rate and YTM.

Reference no: EM133629972

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