Question: A bond with a face value of $ 1 , 0 0 0 pays a 7 % annual coupon and has 5 years to maturity.

A bond with a face value of $1,000 pays a 7% annual coupon and has 5 years to maturity. If the current market interest rate is 5%, how will this bond trade?
At par, because the coupon rate equals the market rate.
At a discount, because its coupon rate is higher than the market rate.
At a premlum, because its coupon rate is higher than the market rate.
At par, because bonds always return to face value at maturity.
6 nts
A bond with a face value of $ 1 , 0 0 0 pays a 7

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