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A bond will be priced at a discount to par value if its coupon rate is less than its yield-to-maturity (YTM).
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- If a coupon-paying bond is selling at a discount, the bond's yield to maturity will be _______ than the bond's coupon interest rate. less equal moreThe coupon rate is greater than the yield to maturity when a bond sells at a premium. Select one: True FalseWhat will be the price of a bond in which the YTM is higher than the coupon rate? a. Below face value b. At face value c. Above face value d. Cannot be determined
- All else constant, a bond will sell at _____ when the coupon rate is _____ the yield to maturity. A. a discount; less than B. a discount; higher than C. a premium; equal to D. a premium; less thanIf the bondholder’s required rate of return equals the coupon interest rate, the bond will sell at _______________. A premium bond sells for ____________ as maturity approaches. The discount bond sells for ____________ as maturity approaches.Which one of the following statements is true? Multiple Choice A premium bond has a current yield that exceeds the bond's coupon rate. The current yield on a par value bond will exceed the bond's yield to maturity. A discount bond has a coupon rate that is less than the bond's yield to maturity. The current yield on a premium bond is equal to the bond's coupon rate. The yield to maturity on a premium bond exceeds the bond's coupon rate.
- A bond has a market price that exceeds its face value. Which one of these features currently applies to this bond? Group of answer choices Yield to maturity greater than coupon rate. Currently selling at par. Yield to maturity less than the coupon rate. Yield to maturity equal to the coupon. Discount bond.A bond has a market price that exceeds its face value. Which one of these features currently applies tothis bond?Select one:a. Yield to maturity less than the coupon rate.b. Currently selling at par.c. Current yield greater than coupon rate.d. Yield to maturity equal to the current yield.e. Discount bond.The yield to maturity on a bond a is fixed in the indenture. b is lower for higher-risk bonds. c is the required return on the bond. d is generally equal to the coupon interest rate.
- A bond’s expected return is sometimes estimated by its yield to maturity (YTM) and sometimes by its yield to call (YTC). The YTC is a better estimate when the bond sells at... a. a discount. b. a premium. c. par value.Which of the following bonds has the least reinvestment risk?A. A bond that has a higher coupon rate than the yield-to-maturityB. A bond that has a lower coupon rate than the yield-to-maturityC. A zero-coupon bondhow will the modified duretion of a floating coupon bond be compared to the modified duration of a fixed rate coupon bond? (same, higher or lower?) (floating coupon adjust coupon accotding to interest rate level, ie higher interest rate results in higher coupon payment)
