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Explain bond-s price will increase over remaining maturity

The following statements are true. Explain why.

a. If a bond's coupon rate is higher than its yield to maturity, then the bond will sell for more than face value.

b. If a bond's coupon rate is lower than its yield to maturity, then the bond's price will increase over its remaining maturity.

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Finance Basics: Explain bond-s price will increase over remaining maturity

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Explain bond-s price will increase over remaining maturity

Reference No:- TGS0557296

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : What happens to the bond-s coupon rate and price

Q : Bank interest-rate risk

Q : Complete the required journal entries to record the bond

Q : What other analysis would you conduct

Q : Explain bond-s price will increase over remaining maturity

Q : Compute the acquisition cost of the machine

Q : Treasury securities from a bank

Q : What is payment if six-month libor is given

Q : What would be cash flow from operations

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Explain bond-s price will increase over remaining maturity

Reference No:- TGS0557296

Recent Questions Asked Finance Basics

Q : What happens to the bond-s coupon rate and price

Q : Bank interest-rate risk

Q : Complete the required journal entries to record the bond

Q : What other analysis would you conduct

Q : Explain bond-s price will increase over remaining maturity

Q : Compute the acquisition cost of the machine

Q : Treasury securities from a bank

Q : What is payment if six-month libor is given

Q : What would be cash flow from operations

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