Based on this equation and the data, it is $.$

value equal to $$1,000.$

Now, consider the situation in which Jackson wants to earn a return of $10\%,$ but the bond being considered for purchase offers a coupon rate of

$7\mathrm{.}00\%.$ Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the

nearest whole dollar, then its intrinsic value of

$($rounded to the nearest whole dollar$)$ is

its par value, so that the bond

is

Given your computation and conclusions, which of the following statements is true?

When the coupon rate is less than Jackson's required return, the intrinsic value will be greater than its par value.

When the coupon rate is less than Jackson's required return, the bond should trade at a discount.

A bond should trade at par when the coupon rate is less than Jackson's required return.

When the coupon rate is less than Jackson's required return, the bond should trade at a premium.