7.

Which bond in the table is a premium bond?

Bond	yield	coupon
A	5%	6%
B	5%	4%

Select one:

a. not enough information to determine

b. Bond A

c. Both Bond A and Bond B

d. Bond B

8.

Which of the following is true about a bond's price at the maturity date?

Select one:

a. the price of all bond is equal to par value at maturity

b. we cannot know a bond's price at maturity since yields are always changing.

c. the value of a bond at maturity is equal to par plus the coupon.

d. the price at maturity depends on yields at that time.

9.

Which of the following is true about a discount bond's price at time goes by? (Assume yields remain constant.)

Select one:

a. a discount bond's price always stays the same since the yield does not change

b. a discount bond's price always stays the same since the coupon does not change

c. investors would never buy a discount bond

d. a discount bond's price has to rise over time to reach $1000 at maturity

10.

A bond sells for $988 and has a yield of 4%. Which of the following must be true about the bond?

Select one:

a. not enough information to determine

b. the coupon rate must be greater than 4%

c. the coupon rate must be equal to 4%

d. the coupon rate must be less than 4%