For an annually paid coupon bond, the face value is $1000, the annual coupon rate is 4.5%, and the yield to maturity is 3.5%, then the bond will be sold at Select one: O A. premium O B. par OC. the price cannot be determined discount

For an annually paid coupon bond, the face value is $1000, the annual coupon rate is 4.5%, and the yield to maturity is 3.5%, then the bond will be sold at Select one: O A. premium O B. par OC. the price cannot be determined discount

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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For an annually paid coupon bond, the face value is $1000, the annual coupon rate is 4.5%, and the yield to
maturity is 3.5%, then the bond will be sold at
Select one:
O A.
premium
B.
par
C. the price cannot be determined
O D.
discount

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