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A bond with a face value of $1,000 matures in 9 years and has a 7% semiannual coupon. The bond currently is traded at $900.
A bond with a face value of $1,000 matures in 9 years and has a 7% semiannual coupon. The bond currently is traded at $900. Which of the following statements is CORRECT? Select one: a. The nominal yield to maturity is 8.28% and you would sell each bond for $900 if you think that a fair market interest rate (discount rate) for such bonds is 9.59%. b. The nominal yield to maturity is 8.62% and you would buy each bond for $900 if you think that a fair market interest rate (discount rate) for such bonds is 5.59%. c. The nominal yield to maturity is 4.80% and you would sell each bond for $900 if you think that a fair market interest rate (discount rate) for such bonds is 6.67%. d. The nominal yield to maturity is 9.59% and you would sell each bond for $900 if you think that a fair market interest rate (discount rate) for such bonds is 8.67%. e. The nominal yield to maturity is 8.62% and you would buy each bond for $900 if you think that a fair market interest rate (discount rate) for such bonds is 10.67%
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