Problem

The following statements are true. Explain why.a. If a bond’s coupon rate is higher than i...

The following statements are true. Explain why.

a. If a bond’s coupon rate is higher than its yield to maturity, then the bond will sell for more than face value.


b. If a bond’s coupon rate is lower than its yield to maturity, then the bond’s price will increase over its remaining maturity.

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Solutions For Problems in Chapter 3