A company issues a bond with a coupon rate of 5%. Since the bond was issued, market interest rates have decreased. What effect will this decrease have on the bond’s market price and its current yield?
A company issues a bond with a coupon rate of 5%. Since the bond was
issued, market interest rates have decreased. What effect will this decrease have on the bond’s market price and its current yield?
The bond will trade below par and its current yield will increase.
The bond will trade above par and its current yield will decrease.
The bond will trade below par and its current yield will decrease.
The bond will trade above par and its current yield will increase.
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"
