Which of the following is TRUE about a bond's face (par) value?

Select one:

a. the par value of a bond is the interest payment

b. the value of a bond will always be equal to par at maturity.

c. the face value of a bond is the same as the bond's price

d. the face value of a bond changes when yields change

If yields remain constant, as a discount bond approaches maturity __________.

Select one:

a. the price must fall

b. the bond will have random price movements

c. the price must rise

d. the price will remain constant

Bond A has a coupon rate of 4%. Bond B has a coupon rate of 3%. Both bonds have a yield of 3.5%. Which bond has the higher price? (All else equal.)

Select one:

a. A

b. not enough information to determine

c. both bonds will have a price of $1000

d. B