Asked by
Caitlin Faith Vania
on Dec 02, 2024
Verified
Which of the following statements is not correct?
A) Bond prices and interest rates are inversely related.
B) When a bond's yield to maturity equals the coupon rate, the bond sells for par.
C) When a bond's yield to maturity is greater than the coupon rate, the bond sells above par.
D) When a bond's yield to maturity is less than the coupon rate, the bond sells above par.
Yield to Maturity
The total return anticipated on a bond if the bond is held until its maturity date.
Coupon Rate
The interest rate stated on a bond or fixed-income security, representing the percentage of its face value paid to the holder annually.
Bond Prices
The market value of bonds, which can fluctuate based on changes in interest rates, credit quality of the issuer, and market demand.
- Comprehend the impact of interest rate fluctuations on bond valuations.
- Comprehend the principles of discount, par, and premium conditions in bond sales transactions.
Verified Answer
AT
Learning Objectives
- Comprehend the impact of interest rate fluctuations on bond valuations.
- Comprehend the principles of discount, par, and premium conditions in bond sales transactions.
Related questions
Because Bond Prices Are Sensitive to Changes in Interest Rates ...
Although the Maturity Value of a Bond Is Fixed, Changes ...
When Interest Rates Change, Bond Yields Adjust Through ...
Which of the Following Statements Is Most Correct ...
Which of the Following Describes the Relationship Between Changes in ...