Question: Answer the question 1. Consider an $8000 Face Value coupon bond with a Coupon Rate of 5% and a 6-year maturity a) If you purchase

Answer the question

1. Consider an $8000 Face Value coupon bond with a Coupon Rate of 5% and a 6-year maturity a) If you purchase this bond for a price = $8000, what will be the interest rate? FV- b) If you purchase this bond for a price = $8300, what can you say about the interest rate (how does it compare to the coupon rate)? Why? c) If you purchase this bond for a price = $7700, what can you say about the interest rate (how does it compare to the coupon rate)? Why? 2. Consider a Discount Bond with a Face Value of $2500 purchased for a Price = $2000. Write out the equation to determine the interest rate 9 you do NOT have to solve it)

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