A 7% coupon bond trades at a yield to maturity of 5%. What will happen to the price of the bond n...
A 7% coupon bond trades at a yield to maturity of 5%. What will happen to the price of the bond next year if the yield remains the same? A. It will rise B. It will fall C. It will not change D. There is no way to determine what will happen to the price
Homework Answers
The Price will fall.
Because it is a premium bond and as the maturity decreases price of
the bond increases.
Please Discuss in case of Doubt
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A 7% coupon bond trades at a yield to maturity of 5%. What will happen to the price of the bond n...
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