A 12 year bond was issued three years ago. It has a Face Value of $1000 and makes coupon payments of $32 every six months. If the current yield to maturity is 6.8% pa compounding semi-annually, will this bond sell at a premium, discount or at par today? Group of answer choices not enough information provided to determine par premium discount

To determine whether the bond is selling at a premium, discount, or at par, we need to calculate the present value of the bond's future cash flows, given the current yield to maturity.

The bond's future cash flows consist of semi-annual coupon payments of $32 for the next 9 years (18 periods, since the bond was issued 3 years ago and it's a 12-year bond), and the face value of$1000 that will be returned at the end of the bond's term.

The formula to calculate the present value of a bond is:

PV = C * (1 - (1 + r)^-n) / r + FV / (1 + r)^n

where:

• PV is the present value (price) of the bond
• C is the semi-annual coupon payment ($32)
• r is the semi-annual yield to maturity (6.8% per annum compounded semi-annually, so 6.8%/2 = 3.4% or 0.034 per period)
• n is the number of periods left until the bond matures (18 periods)
• FV is the face value of the bond ($1000)

Substituting the given values into the formula, we get:

PV = $32 * (1 - (1 + 0.034)^-18) / 0.034 +$1000 / (1 + 0.034)^18

After calculating the above expression, we compare the present value (PV) with the face value (FV). If PV > FV, the bond is selling at a premium. If PV < FV, the bond is selling at a discount. If PV = FV, the bond is selling at par.

Without doing the actual calculation, we can't determine whether the bond is selling at a premium, discount, or at par. Therefore, the answer is "not enough information provided to determine".