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Options: 2) Exceeds be less than equal 3) a premium a discount par The mathematics of bond valuation imply a predictable relationship between the bond's
Options:
2)
Exceeds
be less than
equal
3)
a premium
a discount
par
The mathematics of bond valuation imply a predictable relationship between the bond's coupon rate, the bondholder's required return, the bond's par value, and its intrinsic value. These relationships can be summarized as follows: When the bond's coupon rate is equal to the bondholder's required return, the bond's intrinsic value will equal its par value, and the bond will trade at par. . When the bond's coupon rate is greater to the bondholder's required return, the bond's intrinsic value will its par value, and the bond will trade at a premium . When the bond's coupon rate is less than the bondholder's required return, the bond's intrinsic value will be less than its par value, and the bond will trade atStep by Step Solution
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