Question

A corporate bond has a coupon rate of 9%, a face value of $1,000, and matures

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 will have a yield to maturity on the
bond greater than 9%.
c. An investor who buys the bond for $900 and holds the bond until maturity
will have a capital loss.
d. If the bond’s market price is $900, then the annual interest payments on the
bond will be $81.
57) A $1,000 par value 12-year bond with a 9 percent coupon rate

Solutions

Expert Solution
No answers


Submit Your Answer