Question: Suppose a seven - year, $ 1 , 0 0 0 bond with an 8 . 5 % coupon rate and semi - annual coupons

Suppose a seven-year, $1,000 bond with an 8.5% coupon rate and semi-annual coupons is trading with a yield to maturity of 6.44%.
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 7.32%(APR with semi-annual 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.)
A. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount.
B. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium.
C. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium.
D. 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 7.32%(APR with semi-annual compounding), what price will the bond trade for?
The new price of the bond will be $.(Round to the nearest cent.)
Suppose a seven-year, $1,000 bond with an 8.5% coupon rate and

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