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A bond that was issued one year ago and has 8 more years until maturity, a yield to maturity (YTM) of 10.00 %, and a
A bond that was issued one year ago and has 8 more years until maturity, a yield to maturity (YTM) of 10.00%, and a price of $878.01. The bonds par value of $1,000 is returned at maturity. Which of the following is true of the coupon rate of this bond?
| The coupon rate, defined as the YTM times the price, must be 10.00%. | ||
| The coupon rate is above the YTM because the bonds price is below the par value. | ||
| The coupon rate, defined by the bond price divided by the par value, is 90.00%. | ||
| The coupon rate is below the YTM because the bonds price is below the par value. | ||
| The coupon rate equals the YTM because the bonds price is below the par value. |
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