Suppose a$$ seven$-$year, $$1,000$ bond with a

$9\mathrm{.}22\%$

coupon rate and semiannual coupons is trading with a yield to maturity of

$6\mathrm{.}59\%.$

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

$7\mathrm{.}46\%$

$($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.