Yield to maturity The relationship between a bond's yield to maturity and coupon interest rate can be used to predict its pricing level. For the bond listed below, state whether the price of the bond will be at a premium to par, at par, or at a discount to par. Coupon interest rate Yield to maturity 6% 10% What is the price of the bond in relation to its par value? (Select the best answer below.) O A. The bond sells at par. O B. The bond sells at a premium to par. O C. The bond sells at a discount to par.
Yield to maturity The relationship between a bond's yield to maturity and coupon interest rate can be used to predict its pricing level. For the bond listed below, state whether the price of the bond will be at a premium to par, at par, or at a discount to par. Coupon interest rate Yield to maturity 6% 10% What is the price of the bond in relation to its par value? (Select the best answer below.) O A. The bond sells at par. O B. The bond sells at a premium to par. O C. The bond sells at a discount to par.
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Yield to maturity The relationship between a bond's yield to maturity and coupon interest rate can be used to predict its
pricing level. For the bond listed below, state whether the price of the bond will be at a premium to par, at par, or at a discount
to par.
Coupon interest rate
Yield to maturity
6%
10%
What is the price of the bond in relation to its par value? (Select the best answer below.)
A. The bond sells at par.
B. The bond sells at a premium to par.
O C. The bond sells at a discount to par.
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