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A $51 000, 7.5% bond is purchased 5 years before maturity to yield 5.5% compounded semi-annually. The bond interest is payable semi-annually.
How should we expect this bond to sell?
Discount (bond rate = 7.5% < 5.5% = market rate)
Discount (bond rate = 7.5% > 5.5% = market rate)
Premium (bond rate = 7.5% > 5.5% = market rate)
At par Premium (bond rate = 7.5% = 5.5% = market rate)
Premium (bond rate = 7.5% < 5.5% = market rate)
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