Question: A $1,000 face value bond currently has a discount rate (yield-to-maturity) of 6.69 percent. The bond matures in three years and pays coupon annually. The

A $1,000 face value bond currently has a discount rate (yield-to-maturity) of 6.69 percent. The bond matures in three years and pays coupon annually. The coupon rate is 7 percent. What type of bond it is?

Group of answer choices

Premium bond

Discount bond

Par bond

Zero-coupon bond

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

CareMark Insurance Company has two service lines, health insurance and auto insurance. The two product lines are served by three operating departments which are necessary for providing the two types...

18. You've assembled the following portfolio: Expected return Portfolio weight Beta Stock 0.2 1.3 0.085 0.6 1.1 0.075 0.2 0.4 0.04 What is the beta of the portfolio? C. 1.0 D. 1.1 B. 0.75 A. 0.075...

10. You are a bond manager, looking for arbitrage opportunity in a 2-year 8% annual payment treasury coupon bond 2-year treasury spot rate 8.465% at 5998 today. Suppose, you also observe the...

6. You are a bond manager, looking for arbitrage opportunity in a 2-year 8% annual payment treasury coupon bond trading at $998 today. Suppose, you also observe the following data for today's mar et:...

Hello, I need help with these questions please. Thank you QUESTION 1 A 5.5 percent $1,000 bond matures in 7 years, pays interest semiannually, and has a yield to maturity of 6.23 percent. What is the...

19. About capital budgeting methods, which statement is NOT correct? A. A shorter payback period is preferred over a longer payback period B. If the IRR exceeds the required return, the profitability...

Portfolio weight 0.2 LV. V. VE 18. You've assembled the following portfolio: Stock Expected return Beta 0.085 0.075 0.04 What is the beta of the portfolio? A. 0.075 B. 0.75 1.0 D. 1.1 19. About...

4.0370 You are a bond manager, looking for arbitrage opportunity in a 2-year 8% annual payment treasury coupon bond trading at $998 today. Suppose, you also observe the following data for today's mar...

1. A RM1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in 3 years and pays interest annually. The coupon rate is 7 percent. What is the current price of this...

1. A $1,000 face value bond currently has a yield to maturity of 6.69 percent. The bond matures in three years and pays interest annually. The coupon rate is 7 percent. What is the current price of...

Q 4. Following are the five events of DDT CORPORATION: a. On December 31, purchased a machinery at a price of $ 6,00,000 and signed a note payable due in six months with interest of 9 percent. b. On...

A bond that matures in 7 years sells for $1,020. The bond has a face value of $1,000 and a yield to maturity of 10.5883 percent. The bond pays coupons semiannually. What is the bonds current yield?

Six descriptions are shown on the left and six computer terms are shown on the right. By drawing lines, connect each description to its correct computer term. a form of Al which has been developed to...

Describe in your own words how an aspirator works.

Construct a data set for which the paired t-test statistic is very large, but for which the usual two-sample or pooled t-test statistic is small. In general, describe how you created the data. Does...

Compute Aidens 2017 taxable income on the basis of the following information. Aiden is married but has not seen or heard from his wife for over three years. Salary...

Why would Medicare fraud be a white-collar crime?

Badger Chair Company makes four different types of chairs: Regular, Standard, Business, and Deluxe. The latter two types of chairs were introduced in 2022. The production and sales of each type of...

Time remaining: 0 2 : 2 3 : 2 6 Scenario: Your business wants to advertise to a local audience. Which targeting strategy should you use? Retargeting Contextual targeting Behavioral targeting...

Employee counseling and wellness programs of all types are popular in the United States, despite the relative lack of scientific evidence that conclusively supports the efficacy of these programs. If...

Suppose you were asked by your employer to develop a proposal for an employee assistance program (EAP). Which approach would you recommend: an in-house program run by employees of your organization...

Some people believe that wellness programs infringe on an individuals right to choose his or her own lifestyle, maintaining that an individual has the right to smoke cigarettes, eat junk food, and...