Problema 15-year bond with a face value of 1000 currently, Ask an Expert

Finance

Problem:

A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is CORRECT?

The bond's coupon rate exceeds its current yield.
The bond's current yield exceeds its yield to maturity.
The bond's yield to maturity is greater than its coupon rate.
The bond's current yield is equal to its coupon rate.

Required:

If the yield to maturity stays constant until the bond matures, the bond's price will remain at $850.

Note: Please explain comprehensively and give step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174632

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