Suppose a? seven-year, $1,000 bond with a 8.03 % coupon rate and semiannual coupons is trading with a yield to maturity of 6.57%.
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 7.26 % (APR with semiannual? compounding), at what price will the bond? trade?