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Question: The price of a 5 year, 9 1/2% bond that is being priced to yield 12%. The par value is assumed to be $ 1,000. Before any calculation what is the price of this bond in relation to par value? How do we know? Finally what is the yield-to maturity if an investor pays $ 1250 for this bond.

Before any calculation what is the price of this bond in relation to par value? How do we know?

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