Unknown Variable Name Variable Value Bond's semiannual coupon payment Bond's par value B $1,000 Semiannual required return to expect that Sophia's potential bond investment is currently exhibiting an intrinsic Based on this equation and the data, it is reasonable value greater than $1,000. Now, consider the situation in which Sophia wants to earn a return of 8.50%, but the bond being considered for purchase offers a coupon rate of 10.50%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is Given your computation and conclusions, which of the following statements is true? O A bond should trade at a par when the coupon rate is greater than Sophia's required return. When the coupon rate is greater than Sophia's required return, the bonds intrinsic value will be less than its par value. When the coupon rate is greater than Sophia's required return, the bond should trade at a premium. When the coupon rate is greater than Sophia's required return, the bond should trade at a discount. Unknown Variable Name Variable Value Bond's semiannual coupon payment Bond's par value B $1,000 Semiannual required return to expect that Sophia's potential bond investment is currently exhibiting an intrinsic Based on this equation and the data, it is reasonable value greater than $1,000. Now, consider the situation in which Sophia wants to earn a return of 8.50%, but the bond being considered for purchase offers a coupon rate of 10.50%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is Given your computation and conclusions, which of the following statements is true? O A bond should trade at a par when the coupon rate is greater than Sophia's required return. When the coupon rate is greater than Sophia's required return, the bonds intrinsic value will be less than its par value. When the coupon rate is greater than Sophia's required return, the bond should trade at a premium. When the coupon rate is greater than Sophia's required return, the bond should trade at a discount