Question: ( Related to Checkpoint 9 . 3 ) ( Bond valuation ) Doisneau 1 9 - year bonds have an annual coupon interest of 9
Related to Checkpoint Bond valuation Doisneau year bonds have an annual coupon interest of percent, make interest payments on a semiannual basis, and have a $ par value. If the bonds are trading with a market's required yield to maturity of percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds?
a If the bonds are trading with a yield to maturity of then Select the best choice below.
A the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds.
B the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds.
C the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds.
D there is not enough information to judge the value of the bonds.
b The price of the bonds is $ Round to the nearest cent.
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