题目
题目

COMM_V 298 101 102 103 2025W1 Class 7 and 8 Practice Quiz - Part 1

多重下拉选择题

For each of the following bonds, indicate whether the bond will sell at a discount, at a premium, or at par. Bond A: is a 5-year, $1,000 corporate bond that pays annual coupons of 4%, and the yield to maturity is currently 4%. What will this bond sell at? [ Select ] Premium Par Discount Bond B: is a 2-year, $1,000 corporate bond that pays semi-annual coupons of 9%, and the yield to maturity is currently 6%. What will this bond sell at? Premium Bond C: is a 3-year, $1,000 corporate bond. As an investor, you receive $10 coupons every month. Meanwhile, the yield to maturity is currently 11%. What will this bond sell at? [ Select ] Discount Premium Par  

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We are asked to determine, for each bond, whether it will sell at a discount, at par, or at a premium based on coupon rate versus yield to maturity (YTM). Bond A: 5-year, $1,000 corporate bond, annual coupons of 4%, YTM is 4%. - The coupon rate (4%) equals the yield (4%). When coupon rate equals YTM, the bond tends to trade at par, since the present value of the coupon payments plus the redemption amount matches the face value. - Therefore, for Bond A the price will be at Par. The options to consider are: Discount, Par, Premium. Par is correct because the coupon matches the r......Login to view full explanation

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