Suppose your friend tells you that she recently purchased a $20-$year $$8,000\mathrm{.}00$ bond with a $6\%$ coupon. A month later, she saw it quoted at $81\mathrm{.}750,$ but she does not know what this means.

You can tell by the way the bond is priced that she has a $($US treasury or Agency$)$ bond; otherwise it would have been priced $(816/8,81$:$24,81$:$75\mathrm{.}0).$ You explain that the market price of her bond is now $(81\mathrm{.}75,6540\mathrm{.}00,8081,657,200).,$ meaning it is now a $($discount$,$ premium$)$ bond.

Based on the market price of the bond you calculated, you can tell that market interest rates have gone $($up$,$down$)$ since the bond was issued. The current yield of the bond is now $(6\mathrm{.}00\%,7\mathrm{.}12\%,7\mathrm{.}34\%,8\mathrm{.}07\%).$