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Question
A corporate bond has a coupon rate of 9%, a face value of $1,000, and matures in 15 years. Which of the following statements is MOST correct?A) An investor with a required return of 10% will value the bond at more than $1,000.
B) An investor who buys the bond for $900 and holds the bond until maturity will have a capital loss.
C) An investor who buys the bond for $900 will have a yield to maturity on the bond greater than 9%.
D) If the bond's market price is $900, then the annual interest payments on the bond will be $81.
Answer
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