Question
Quickee-Mart sold an issue of 20-year $1,000 par value bonds to the public that carry a 8.5% coupon rate, payable semi-annually. It is now 10
Quickee-Mart sold an issue of 20-year $1,000 par value bonds to the public that carry a 8.5% coupon rate, payable semi-annually. It is now 10 years later and the current yield to maturity is 8.0%. If interest rates remain at 8.0% until Quickee-Marts bonds mature, what will happen to the value of the bonds over time?
A. The bonds will sell at a premium and decline in value until maturity.
B. The bonds will sell at a discount and rise in value until maturity.
C. The bonds will sell at a discount and fall in value until maturity.
D. The bonds will sell at a premium and rise in value until maturity.
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