If a bond is selling for its face value, which of the following statements is true?...
If a bond is selling for its face value, which of the following statements is true?
a. The coupon rate and the yield to maturity are the same
b. The par value is less than the face value
c. This is only possible if this is a zero coupon bond
d. all of the statements above are true
Homework Answers
a. The coupon rate and the yield to maturity are the same
When price of the bind is equal to the par value, coupon rate will always be equal to the yield to maturity. The price will be eual to the face value because coupons and the face value are being discounted at the same yield to maturity.
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one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
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--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
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The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--the answer for #1 I got was $44.21 decrease & it was
incorrect.
The par value of a bond is less than its current price. Which
one of the following applies to this bond?
--- I put yeild to maturity is greater than the coupon rate
& that was incorrect
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