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You purchased a bond last year. It has a 5% annual pay coupon, 25 years to maturity and a face value of $1,000. Interest rates
You purchased a bond last year. It has a 5% annual pay coupon, 25 years to maturity and a face value of $1,000. Interest rates have decreased from 5% to 4%. Which statement best describes your situation? Select one: The bond value decreased from face value to below face value The bond started out valued at less than face value and decreased further in value None of the presented responses is correct The bond started out valued above face value and increased in value further The bond increased from face value to above face value
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