Calculate the price of a 6.5% coupon bond with 17 years left to maturity and a market interest rate of 10.5%. (Assume interest rates are semiannual and par value is $1,000.) Is this a discount or premium bond?
A) $685.93; discount
B) $791.03; discount
C) $1,051.83; premium
D) $1,176.31; premium
Correct Answer:
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