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Question
If the yield to maturity (the market rate of return) of a bond is less than its coupon rate, the bond should be:
a. selling at a discount; i.e., the bond's market price should be less than its face (maturity) value.
b. selling at a premium; i.e., the bond's market price should be greater than its face value.
c. selling at par; i.e., the bond's market price should be the same as its face value.
d. a floating-rate bond yielding market adjusted interest.
e. an indexed bond that adjusts interest payments on the basis of an inflation index.
Answer
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Related questions
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Q:
Which of the following is true about financial institutions in the United States compared to those in other countries?
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Q:
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d. Firms with relatively high debt ratios have higher expected returns when business is good.
e. Firms with relatively low debt ratios have higher expected returns when business is poor.