if i think you are just guessing you will receive a low rating If the yield to m

Question

if i think you are just guessing you will receive a low rating

If the yield to maturity (the market rate of return) of a bond is less than its coupon rate, the bond should be
a. selling at a discount; i.e., the bond's market price should be less than its face (maturity) value.
b. selling at a premium; i.e., the bond's market price should be greater than its face value.
c. selling at par; i.e., the bond's market price should be the same as its face value.
d. purchased because it is a good deal.

Explanation / Answer

B> because as the bond is being sold for higher price than what it promises.it means that people are paying more for the bond than what it actually demands. hence we can call the bond is being sold on premium cheers :)

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.