This question is worth 3 points. Consider the following data concerning four corporate bonds, all of which have a face value of $1,000 and have semiannual compounding:
Which of these bonds is currently priced at a discount?
| a. |
Bond 1 |
|
| b. |
Bond 2 |
|
| c. |
Bond 3 |
|
| d. |
Bond 4 |
|
| e. |
There is not enough information to answer this question. |
Homework Answers
Bond price and interest rates has inverse relationship. If interest rates increase, bond will decrease and vice-versa.
Hence, correct option is B. Bond 2
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