If its yield to maturity is less than its coupon rate, a bond will sell at...
If its yield to maturity is less than its coupon rate, a bond will sell at a _____, and increases in market interest rates will _____ .
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discount; decrease this discount |
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discount; increase this discount |
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premium; decrease this premium |
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premium; increase this premium |
Homework Answers
The correct answer is option No. c - premium, decrease the premium.
Which means that the bond will sell at greater than par value as a result of which any increase in the market rates will result in decreasing the premium percentage/amount of the bond.
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