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Determine what price will the bond trade for

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Reference no: EM132822930

Suppose a seven-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading with a yield to maturity of 6.75%.

Problem a. Is this bond currently trading at a discount, at par, or at a premium? Explain.

Problem b. If the yield to maturity of the bond rises to 7% (APR with semiannual compounding), what price will the bond trade for?

Reference no: EM132822930

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