Problem 3-03, Bond concepts
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
If rates rise, what happens to bond prices? If the yield is greater than the coupon, how does this impact the bond’s price? If the price is greater than par, then what is the relationship between the yield and coupon rates? Which sell for more, high-coupon bonds or low-coupon bonds? When interest rates change, do high-coupon bonds change proportionately more or less than low-coupon bonds?