Info: A risk-free 1-year 6% coupon bond has YTM=9% while a risk-free 1-year 16% coupon...
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Info: A risk-free 1-year 6% coupon bond has YTM=9% while a risk-free 1-year 16% coupon bond has YTM=9.1%
Question: Consider a 1-year bond that currently sells at par. Assuming interest rates are not random, do you think this bond will be selling at a discount, premium, or at par 6 months from now? No calculations are required, but, if you cannot answer this question without calculations, you can find the coupon rate for this bond and compute its price 6 month from now.
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