Question: Bond A is a 9 percent coupon bond while Bond B is a 5 percent coupon bond. Both bonds makeannual payments, have a YTM of

Bond A is a 9 percent coupon bond while Bond B is a 5 percent coupon bond. Both bonds makeannual payments, have a YTM of 7 percent, and have 10 years to maturity. The par value for bothbonds is $1,000.(a) Which bond is a premium bond? Which bond is a discount bond? Explain without calculation.(8 marks)(b) Calculate the price of both bonds. (6 marks)(c) Calculate the current yield for both bonds. (6 marks)

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