If a bond sells at a premium, then which of the following relationships hold true? (YTM...
If a bond sells at a premium, then which of the following relationships hold true? (YTM is the bond's yield to maturity).
| a. |
PV < FV and YTM > the coupon rate. |
|
| b. |
PV < FV and YTM equals the coupon rate. |
|
| c. |
PV < FV and YTM < the coupon rate. |
|
| d. |
PV > FV and YTM > the coupon rate. |
|
| e. |
PV > FV and YTM < the coupon rate |
Homework Answers
If a bond sells at a premium, then which of the following relationships hold true? (YTM is the bond's yield to maturity).
|
e. PV > FV and YTM < the coupon rate |
PV = Present value of the bond, i.e. price of the bond.
FV= Face value of the bond
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