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If a bond's coupon rate is less than current interest rates, investors will likely: hold the bond until maturity, at which point its market value
If a bond's coupon rate is less than current interest rates, investors will likely:
hold the bond until maturity, at which point its market value will equal its coupon rate. | ||
sell the bond at a premium, because investors are sensitive to price changes in bonds caused by increased interest rates. | ||
sell the bond at a discount, because investors recognize that the lower the bond's price the higher is its yield. | ||
a and c |
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