Suppose a $7-$year, $$$$1,000$

bond with a coupon rate of $10\%$

and semiannual coupons is trading with a yield to maturity of $8\mathrm{.}93\%.$

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 $9\mathrm{.}51\%$

$($APR with semiannual$$ compounding$),$ at what price will the bond$$ trade?

Question content area bottom

Part $1$

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.$)$

A$.$

at a premium because the coupon rate is greater than the yield to maturity.

B$.$

at a discount because the coupon rate is greater than the yield to maturity.

C$.$

at par because the coupon rate is equal to the yield to maturity.

D$.$

at a premium because the yield to maturity is greater than the coupon rate.