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Questions

BFIN011 Week 6: Practice Quiz

Multiple dropdown selections

Identify the type of bond in the following conditions            Market rate vs Coupon rate                  Face value vs Present Value                         Bond (Discount/Par/Premium)             Market rate > Coupon rate Face value > Present Value [ Select ] Par Discount Premium Market rate = Coupon rate Face value = Present Value [ Select ] Par Discount Premium Market rate < Coupon rate Face value < Coupon rate [ Select ] Premium Par Discount  

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To approach this, we match each market condition with the typical bond pricing outcome and its relation to face value. First dropdown: - Market rate > Coupon rate: When the market interest rate rises above the coupon, the bond’s coupon is less attractive, so the bond must be sold for less than its face value to attrac......Login to view full explanation

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