Quiz Ch 07 – T/F Bond Pricing Dynamics Based on Market Interest Rates

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: For a bond with a $1,000 par value, $100 annual interest, 5-year maturity, non-callable feature, and no expected default, a premium will occur when market rates are below 10%, while a discount will arise if rates surpass 10%.

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  • Search Terms: a. b. false true $, % %. a and annual are at be below bond called, cannot default. discount expected greater has if interest is makes market maturity, not of par payments premium rates sell should than the to value, years
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