Question: If a 1 0 - year, $ 1 , 0 0 0 par, zero coupon bond were issued at a price that gave investors a

If a 10-year, $1,000 par, zero coupon bond were issued at a price that gave investors a 10% yield to maturity, and if interest rates then dropped to the point where rd = YTM =5%, the bond would sell at a premium over its $1,000 par value.

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