Suppose a company decides not $to$ wait until maturity and retires some $of$ its bond debt early $onan$

interest payment date. What happens $to$ the $BVDif$ the debt $is$ retired $in$ the following

circumstances? $(Hint$: Think about what happens $to$ the market price $of$ the bond.$)$

The market rate equals the coupon rate.

The $BVD$ increases.

The $BVD$ decreases.

The $BVD$ remains the same.

The market rate $is$ higher than the coupon rate.

The $BVD$ increases.

The $BVD$ decreases.

$heBVD$ remains the same.

The market rate $is$ lower than the coupon rate.

The $BVD$ increases.

The $BVD$ decreases.

The $BVD$ remains the same.