If the market rate of interest is 7%, the price of 6% bonds paying interest semiannually with a face value of $500,000 will be A. greater than or less than $500,000, depending on the maturity date of the bonds B. equal to $500,000 C. less than $500,000 D. greater than $500,000

If the market rate of interest is 7%, the price of 6% bonds paying interest semiannually with a face value of $500,000 will be A. greater than or less than $500,000, depending on the maturity date of the bonds B. equal to $500,000 C. less than $500,000 D. greater than $500,000

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter6: Bonds (debt) - Characteristics And Valuation

Section: Chapter Questions

Problem 11PROB

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Question

If the market rate of interest is 7%, the price of 6% bonds paying interest semiannually with a face value of $500,000 will be

A. greater than or less than $500,000, depending on the maturity date of the bonds

B. equal to $500,000

C. less than $500,000

D. greater than $500,000

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