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A corporate bond has a coupon rate of 9%, a face value of $1,000, and ma- tures in 15 years. Which of the following statements
A corporate bond has a coupon rate of 9%, a face value of $1,000, and ma-
tures in 15 years. Which of the following statements is most correct?
a. An investor with a required return of 10% will value the bond at more than
$1,000.
b. An investor who buys the bond for $900 will have a yield to maturity on the
bond greater than 9%.
c. An investor who buys the bond for $900 and holds the bond until maturity
will have a capital loss.
d. If the bonds market price is $900, then the annual interest payments on the
bond will be $81.
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