What Happens When a Bond's Expected Cash Flows Are Discounted

question 54

Multiple Choice

What happens when a bond's expected cash flows are discounted at a rate lower than the bond's coupon rate?

• A)The price of the bond increases
• B)The coupon rate of the bond increases
• C)The par value of the bond decreases
• D)The coupon payments will be adjusted to the new discount rate

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