Ask Question
18 October, 22:31

A fixed coupon bond with par value of $1,000 has a coupon of 6%, semiannually payable. The current annual nominal market interest rate (i. e., yield to maturity) for this bond is 8%. Therefore the bond is selling ... and the bond's current yield is ...

+4
Answers (1)
  1. 18 October, 23:59
    0
    at a discount; greater than 6%

    Explanation:

    A fixed coupon bond is a long-term debt paper that has a predetermined and fixed interest rate. This is known as coupon rate. In this example, the bond's yield to maturity is higher than the coupon rate. Therefore, this is selling at a discount. Moreover, because the bond is selling at discount, current yield would be more than coupon rate (6%).
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A fixed coupon bond with par value of $1,000 has a coupon of 6%, semiannually payable. The current annual nominal market interest rate (i. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers