Question
Suppose there are two bonds from the same sector with the same risk and maturity.One is a discounted bond and the other is a premium
Suppose there are two bonds from the same sector with the same risk and maturity. One is a discounted bond and the other is a premium bond.
1. Which one might have a higher coupon rate and why?
2. Which is likely to have a higher YTM and why?
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A premium bond is likely to have a higher coupon rate than a discounted bond A premium bond is one whose current market price is higher than its face ...Get Instant Access to Expert-Tailored Solutions
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Precalculus
Authors: Jay Abramson
1st Edition
1938168348, 978-1938168345
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