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If current interest rates are lower than the coupon rate, investors owning a bond can: a. sell the bond at a premium, because lower interest
If current interest rates are lower than the coupon rate, investors owning a bond can:
a. | sell the bond at a premium, because lower interest rates will cause investors to bid price up to the point where their investment yields the market's return. | |
b. | only sell the bond at a discount (below face value), recognizing that the lower the price of the bond, the closer the yield becomes to the market's return. | |
c. | be wise to hold the bond until maturity, at which point the market value will greater than the face value of the bond. | |
d. | None of the above |
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