Semiannual coupons is trading with yield to maturity

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Reference no: EM131517792

Suppose a? seven-year, $1,000 bond with a 8.14% coupon rate and semiannual coupons is trading with a yield to maturity of 5.75%.

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

b. If the yield to maturity of the bond rises to 5.92% ?(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. ... at a discount because the coupon rate is greater than the yield to maturity

B. ... at par because the coupon rate is equal to the yield to maturity

C. ... at a premium because the coupon rate is greater than the yield to maturity

D. ... at a premium because the yield to maturity is greater than the coupon rate.

Reference no: EM131517792

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