The Popmarket Company has a bond outstanding with a face value of $1,200 that reaches maturity in 4 years. The bond certificate indicates that the stated coupon rate for this bond is 9.0 % and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Popmarket bond is 5%, then this bond will trade at A. par B. a discount C. a premium D. none of the above

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The Popmarket Company has a bond outstanding with a face value of $1,200 that
reaches maturity in 4 years. The bond certificate indicates that the stated coupon rate
for this bond is 9.0 % and that the coupon payments are to be made semiannually.
Assuming the appropriate YTM on the Popmarket bond is 5%, then this bond will
trade at
A. par
B. a discount
C. a premium
D. none of the above
Transcribed Image Text:The Popmarket Company has a bond outstanding with a face value of $1,200 that reaches maturity in 4 years. The bond certificate indicates that the stated coupon rate for this bond is 9.0 % and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Popmarket bond is 5%, then this bond will trade at A. par B. a discount C. a premium D. none of the above
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When required rate of bond equal to coupon rate than price of bond equal to par value of bond.


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