Question: 3 (10 points) ABC Inc. issued a bond 10 year bond 5 years ago. The coupon rate is 6% and it is pald semi-annually and

3 (10 points) ABC Inc. issued a bond 10 year bond 5 years ago. The coupon rate is 6% and it is pald semi-annually and face value of $1000. (10 points) a) If1 the market interest rate is 10% per year, please calculate the fair market value of the bond. (3 points) If the market interest rate is 5% per year, please calculate the fair market value of the b) bond. (4 points) A company specific event just occurred, and the bond is now trading at $880, Please c) calculate its yield to maturity. Is it now a premium or discount bond? (4 points)

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