Suppose a 4-year, $1,000 bond with a 11.86% coupon rate and annual coupons is trading with...

 

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Suppose a 4-year, $1,000 bond with a 11.86% coupon rate and annual coupons is trading with a yield to maturity of 9.87%. a. Is this bond currently trading at a discount, at par, or at a premuim? Explain. b. If the yield to maturity of the bond rises to 10.41% (with annual coupons), at what price will the bond trade? a. Is this bond currently trading at a discount, at par, or at a premuim? Explain. The bond is currently trading... (Select the best choice below.) O A.... at a discount because the coupon rate is greater than the yield to maturity OB. ... at a premium because the coupon rate is greater than the yield to maturity OC.... at a premium because the yield to maturity is greater than the coupon rate. O D.... at par because the coupon rate is equal to the yield to maturity COS b. If the yield to maturity of the bond rises to 10.41% (with annual coupons), at what price will the bond trade? The bond will trade for $. (Round to two decimal places.) Suppose a 4-year, $1,000 bond with a 11.86% coupon rate and annual coupons is trading with a yield to maturity of 9.87%. a. Is this bond currently trading at a discount, at par, or at a premuim? Explain. b. If the yield to maturity of the bond rises to 10.41% (with annual coupons), at what price will the bond trade? a. Is this bond currently trading at a discount, at par, or at a premuim? Explain. The bond is currently trading... (Select the best choice below.) O A.... at a discount because the coupon rate is greater than the yield to maturity OB. ... at a premium because the coupon rate is greater than the yield to maturity OC.... at a premium because the yield to maturity is greater than the coupon rate. O D.... at par because the coupon rate is equal to the yield to maturity COS b. If the yield to maturity of the bond rises to 10.41% (with annual coupons), at what price will the bond trade? The bond will trade for $. (Round to two decimal places.)

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The detailed answer for the above question is provided below a The bond is currently trading at a pr... View the full answer