install windows windows 7 on new vm in para 9

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I want to install windows windows 7 on a new vm, which I have not yet set up because I don't know the procedure to do either or both of these. I have Windows 7 on an installation disk and run para 9 over OSX 10.9.2. Should I first set up a new vm or will parallels do that automatically when I run the installation disk? I want to avoid installing it on my existing vm.
 
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