Question 227 bond pricing, premium par and discount bonds
Which one of the following bonds is trading at a premium?
(a) a ten-year bond with a $4,000 face value whose yield to maturity is 6.0% and coupon rate is 5.9% paid semi-annually.
(b) a fifteen-year bond with a $10,000 face value whose yield to maturity is 8.0% and coupon rate is 7.8% paid semi-annually.
(c) a five-year bond with a $2,000 face value whose yield to maturity is 7.0% and coupon rate is 7.2% paid semi-annually.
(d) a two-year bond with a $50,000 face value whose yield to maturity is 5.2% and coupon rate is 5.2% paid semi-annually.
(e) None of the above bonds are premium bonds.