When interest rates ________, the prices of currently outstanding par-bonds ___________. Select one: a. rise; fall, because they are now trading at a premium b. rise; rise, because they are now trading at a premium c. fall; rise, because they are now trading at a discount d. fall; remain unchanged, because their yields are fixed e. fall; rise, because they are now trading at a premium
When interest rates ________, the prices of currently outstanding par-bonds ___________. Select one: a. rise; fall, because they are now trading at a premium b. rise; rise, because they are now trading at a premium c. fall; rise, because they are now trading at a discount d. fall; remain unchanged, because their yields are fixed e. fall; rise, because they are now trading at a premium
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 3Q: The rate of return on a bond held to its maturity date is called the bonds yield to maturity. If...
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When interest rates ________, the prices of currently outstanding par-bonds ___________.
Select one:
a. rise; fall, because they are now trading at a premium
b. rise; rise, because they are now trading at a premium
c. fall; rise, because they are now trading at a discount
d. fall; remain unchanged, because their yields are fixed
e. fall; rise, because they are now trading at a premium
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