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QUESTION
Calculate the price of a $1,000 face value 10 yr, 4% coupon bond with semi-annual payments if investments of similar quality are yielding 5.
Calculate the price of a $1,000 face value 10 yr, 4% coupon bond with semi-annual payments if investments of similar quality are yielding 5.2%. Is this bond selling at a discount, premium, or par value?Do you notice a difference? Why?
