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If an investor purchases a bond when its yield to maturity is higher than the coupon rate, then the bond's price will be expected to:
If an investor purchases a bond when its yield to maturity is higher than the coupon rate, then the bond's price will be expected to: A. increase over time, reaching par value at maturity B. exceed the face value at maturity C. be less than the face value at maturity D. decline over time, reaching par value at maturity QUESTION 35 EXTRA CREDIT: What is the price of a stock given the following attributes (round the answer to the whole number): The risk free rate is 3% The risk premium (Rm-Rf) is 896 Recent dividend was $20 Constant growth rate of the dividend is 696 Beta is 1.25 A. Impossible to tell B. $286 C. $342 D. $303 QUESTION 36 As you increase the interest rate of an annuity, what happens to the present value and the future value? A. The present value goes up and the future value goes down B. They both go up C. They both go down D. The present value goes down and the future value goes up
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