Home › B.Com Banking & Insurance › Financial Management › Bonds and Bond Valuation › A bond whose coupon rate exceeds its yield to ma…
A bond whose coupon rate exceeds its yield to maturity will sell:
AAt a discount
BAt par value
CAt a deficit
DAt a premium
Answer & Solution
Correct answer: D. At a premium
1. Demand pushes the price up.
2. The price exceeds face value.
3. It sells at a premium.
_Source: OpenStax Principles of Finance 2e, Chapter 10, Bonds and Bond Valuation._
Related questions
The yield column of a bond table shows the return an investor gets if the bond is:Coupon rates are always expressed in which terms, even when payments are more frequent?If a 1,000 par bond pays 6% annually in two equal instalments, each payment is:A bond paying 5% on a par value of 1,000 makes an annual coupon payment of:A bond paying 8% on a par value of 1,000 makes an annual coupon payment of:Because bonds are fixed-income investments, they are exposed to risks that can hurt their:Investment-grade bonds are especially popular because many commercial banks and pension fuBonds in the top rating bands are described as: