Assume the zero$-$coupon yields on default$-$free securities are as summarized in the following table:

$.$ Consider a $5-$year, default$-$free bond with annual

coupons of $7\%$ and a face value of $$1,000.$

a$.$ Without doing any calculations, determine whether this bond is trading at a premium or at a discount. Explain.

b$.$ What is the yield to maturity on this bond?

c$.$ If the yield to maturity on this bond increased to $7\mathrm{.}30\%,$ what would the new price be$?$

a$.$ Without doing any calculations, determine whether this bond is trading at a premium or at a discount. Explain.

The bond is trading at a premium because its yield to maturity is a weighted average of the yields of the zero$-$coupon bonds. $($Select from the drop$-$down

menu.$)$

b$.$ What is the yield to maturity on this bond?

The yield to maturity on this bond is $\%.($Round to two decimal places.$)$

Data table