(Related to Checkpoint 9.3) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 14 percent, make interest payments on a semiannual basis, and have a $1,000npar value. If the bonds are trading with a market's required yield to maturity of 13 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds? a. If the bonds are trading with a yield to maturity of 13 %, then (Select the best choice below.) A. the bonds should be selling at a because the bond's coupon rate is than the yield to maturity of similar bonds. B. the bonds should be selling at a because the bond's coupon rate is than the yield to maturity of similar bonds. C. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds. D. there is not enough information to judge the value of the bonds.
(Related to Checkpoint 9.3) (Bond valuation) Doisneau 18-year bonds have an annual coupon interest of 14 percent, make interest payments on a semiannual basis, and have a $1,000npar value. If the bonds are trading with a market's required yield to maturity of 13 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds?
a. If the bonds are trading with a yield to maturity of 13 %, then (Select the best choice below.)
A. the bonds should be selling at a because the bond's coupon rate is than the yield to maturity of similar bonds.
B. the bonds should be selling at a because the bond's coupon rate is than the yield to maturity of similar bonds.
C. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds.
D. there is not enough information to judge the value of the bonds.
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