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Suppose the market interest rate is 6% now. There is a 8% coupon T-Bond (pay coupon semi- annually) with a maturity date in 5 years.

Suppose the market interest rate is 6% now. There is a 8% coupon T-Bond (pay coupon semi- annually) with a maturity date in 5 years. Which of the following statement is TRUE?

a. The current price of this T-bond must be more than $1000.

b. The current price of this T-bond must be less than $1000.

c. The value of this T-bond on the maturity date is exactly $1040.

d. Both A and C are TRUE. e. Both B and C are TRUE.

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