Question
Which of the following statements is INCORRECT. All else equal, 1.If a bond's yield-to-maturity (YTM, i.e., market interest rate) is greater than its coupon rate,
Which of the following statements is INCORRECT. All else equal,
1.If a bond's yield-to-maturity (YTM, i.e., market interest rate) is greater than its coupon rate, then the bond is trading at a premium.
2.The estimated market price of a bond is the sum of its future discounted cash flows.
3.Duration measures the sensitivity of a bond's price to changes in interest rate.
4.If a bond's market value is equal to its par amount, then its YTM will be equal to its coupon rate.
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International Financial Management
Authors: Cheol Eun, Bruce G. Resnick
8th edition
125971778X, 978-1259717789
