Which one of the following statements is true regarding bond valuation? a. When yield to maturity is higher than coupon rate, the bond is called a premium bond b. When yield to maturity is higher than coupon rate, the bond is traded at par c. When yield to maturity is less than coupon rate, the bond is called a discount bond d. When yield to maturity is higher than coupon rate, the bond is called a discount bond e. When yield to maturity is equal to coupon rate, the bond is called a premium bond
Which one of the following statements is true regarding bond valuation? a. When yield to maturity is higher than coupon rate, the bond is called a premium bond b. When yield to maturity is higher than coupon rate, the bond is traded at par c. When yield to maturity is less than coupon rate, the bond is called a discount bond d. When yield to maturity is higher than coupon rate, the bond is called a discount bond e. When yield to maturity is equal to coupon rate, the bond is called a premium bond
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 9QTD
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Which one of the following statements is true regarding
a. When yield to maturity is higher than coupon rate, the bond is called a premium bond
b. When yield to maturity is higher than coupon rate, the bond is traded at par
c. When yield to maturity is less than coupon rate, the bond is called a discount bond
d. When yield to maturity is higher than coupon rate, the bond is called a discount bond
e. When yield to maturity is equal to coupon rate, the bond is called a premium bond
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