Finance

posted by .

A 12-year bond has an annual coupon rate of 9%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 7%. Which of the following statements is CORRECT? (Points: 4)
The bond is currently selling at a price below its par value.
If market interest rates decline, the price of the bond will also decline.
If market interest rates remain unchanged, the bond's price one year from now will be lower than it is today.
If market interest rates remain unchanged, the bond's price one year from now will be higher than it is today.
The bond should currently be selling at its par value.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Finance

    Bond Pricing: A 6-year Circular File bond pays interest of $80 annually and sells for $950. What is its coupon rate, current yield, and yield to maturity?
  2. Finance

    Bond Yields. An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for $1,100. a. What is the current yield on the bond?
  3. Finance

    Dahler Corporation has just issued a bond with a maturity of 20 years, coupon rate of 10.25%, and a market price of $1330.25. Dahler makes semiannual coupon payments. a) what is the YTM expressed as a quoted rate based on semi-annual …
  4. Finance

    An investor purchases a 10-year U.S. government bond for $800. The bond's coupon rate is 10 percent and,?
  5. Finance

    A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.
  6. Finance

    A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.
  7. Finance

    Which of the following statments is CORRECT?
  8. Finance

    Bond value and time--Constant required returns Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain it …
  9. Finance

    1.You buy a SML Bond for $980. The bond has a face value of $1000 and an annual coupon rate of 8%. There are 5 years left until maturity. Because of a special delivery by the stork, you decide to sell the bond at the end of year 2 …
  10. Finance

    Which of the following statements about the relationship between yield to maturity and bond prices is FALSE?

More Similar Questions