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A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon rate and 6% yield to maturity. Which of the
A 10 year Treasury bond with face value of $1000 is currently offering 8% annual coupon rate and 6% yield to maturity. Which of the following statements about the bond is NOT true?
- The market price of bond is higher than $1000.
- A year from now if the yield to maturity stays the same, the market price of the bond will be higher than what it is today.
- If you buy the bond today and hold it until the bond matures, your annual return will be about 6% when there is no default.
- If the yield to maturity becomes 7% tomorrow, the price of the bond will be lower than what it is today.
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