If a Bond Has a Coupon Rate That Is Greater

question 3

Multiple Choice

If a bond has a coupon rate that is greater than the bond's YTM, the bond:

• A) will sell at a premium.
• B) will sell at par.
• C) will sell at a discount.
• D) will not be called.

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Definitions:

Office Equipment

Fixed assets that are used in an office environment for the purpose of performing business operations, including computers, printers, and furniture.

Journal Entry

A record in accounting that represents a transaction in the ledger.

Notes Payable

Written promissory notes in which a borrower agrees to pay back the lender at a later date, often with interest.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.