1.When pricing bonds, if a bond's coupon rate is less than the required rate of return, then:...

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1.When pricing bonds, if a bond's coupon rate is less than the required rate of return, then:

a.The holder of the bond is assured of a profit regardless of when the bond is eventually sold.

b.The holder of the bond will realize a capital gain if the bond is held to maturity.

c.The bond sells at par because the required rate of return is adjusted to reflect the discrepancy.

d.The bond sells at a premium if it has a long maturity, a discount if it has a short maturity.

e.The bond sells at a discount if it has a long maturity, a premium if it has a short maturity.

Posted Date: May 19, 2024 02:11 AM

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1.When pricing bonds, if a bond's coupon rate is less than the required rate of return, then:...

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