Question: Please answer B and the process Thank you Suppose a seven-year. $1,000 bond with a 7.8% coupon rate and semiannual coupons is trading with a

Please answer B and the process

Thank you

Suppose a seven-year. $1,000 bond with a 7.8% coupon rate and semiannual coupons is trading with a yield to maturity of 6.57% a. Is this bond currently trading at a discount, at par, or at a premium? Explain. b. If the yield to maturity of the bond rises to 7.07% (APR with semiannual compounding), what price will the bond trade for? a. Is this bond currently trading at a discount, at par, or at a premium? Explain. (Select the best choice below.) OA. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium. B. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount. C. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. OD. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. b. If the yield to maturity of the bond rises to 7.07% (APR with semiannual compounding), what price will the bond trade for? The new price of the bond is $. (Round to the nearest cent.)

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