You are debating buying a junk bond with a CCC credit rating. The market should discount expected cash flows of this bond at 8%. The bond is a zero coupon bond with YTM (implied by its market price) of 8%. Is this bond over or underpriced? Provide a short justification. You do not need to conduct any calculations.

Answer rating: 100% (QA)

The bond being a zerocoupon bond implies that the bond does not make any periodic int... View the full answer