If You Own a Bond with a Seven Percent Coupon

question 177

Short Answer

If you own a bond with a seven percent coupon rate and new bonds are paying five percent, what will happen to your bond's market price?

---

Definitions:

Primary Deviance

The initial act of rule-breaking or deviant behavior before society labels it as such, which does not yet affect an individual’s self-concept or societal identification.

Deviant Label

The branding of behaviors or individuals that deviate from societal norms as wrong or abnormal, influencing how they are perceived and treated by others.

Tertiary Deviance

Redefining the stigma associated with a deviant label as a positive phenomenon.

W. I. Thomas

An influential sociologist known for the Thomas theorem which states "If men define situations as real, they are real in their consequences," highlighting the subjective nature of reality in social contexts.