Use the Information for the Question(s) Below

question 41

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semi-annually.
-Assuming the appropriate YTM on the Sisyphean bond is 9%,then this bond will trade at

• A) a premium.
• B) a discount.
• C) par.
• D) none of the above

---

Definitions:

Interest Payable

The amount of interest that a borrower owes to a lender at a specific point in time but has not yet paid.

Contract Rate

The interest rate specified in a contract, such as a loan agreement or bond indenture.

Market Rate

The prevailing price or rate at which goods, services, or securities are traded in an open market.

Discount

A reduction from the usual cost of something, often applied to prompt payments or for certain groups of people like students or seniors.