Yield to maturity The relationship between a bond's yield to maturity and coupon interest rate can be used to predict its pricing level. For the bond listed below, state whether the price of the bond will be at a premium to par, at par, or at a discount to par. Coupon interest rateYield to maturity6%8%What is the price of the bond in relation to its par value?(Select the best answer below.) A.The bond sells at a premium to par.B.The bond sells at par.C.The bond sells at a discount to par.

Yield to maturity is return on the bond if held till maturity

Answered: Yield to maturity The relationship…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 8FPE: Describe and differentiate between a bonds (a) current yield and (b) yield to maturity. Why are...

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Yield to maturity

The relationship between a bond's yield to maturity and coupon interest rate can be used to predict its pricing level. For the bond listed below, state whether the price of the bond will be at a premium to par, at par, or at a discount to par.

Coupon interest rate	Yield to maturity
6%	8%

What is the price of the bond in relation to its par value?(Select the best answer below.)

A.The bond sells at a premium to par.

B.The bond sells at par.

C.The bond sells at a discount to par.

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