Assume that the par value of a bond is $1,000. - 4740

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Request Description

Assume that the par value of a bond is $1,000. Consider a bond where the coupon rate is 9% and the current yield is 10%. Which of the following statements is true? 

A. The current yield was a lot greater than 9% when the bond was first issued 

B. The current yield was a lot less than 9% when the bond was first issued

 C. The market value of the bond is less than $1,000 

D. The market value of the bond is more than $1,000 

 
Solution Description

Assume that the par value of a bond is $1,000. Consider a bond where the coupon rate is 9% and the current yi