When a Bond's Required Return Is Greater Than Its Coupon

question 36

True/False

When a bond's required return is greater than its coupon interest rate, the bond value will be less than its par value.

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Definitions:

Primacy Effect

The tendency to remember the first pieces of information in a series better than the information in the middle.

Computer Programming

The process of designing, writing, testing, debugging, and maintaining the source code of computer programs.

Defensive Attribution

A theory suggesting that people attribute unforeseeable actions either to the victim or the perpetrator, in an effort to distance themselves from the possibility of experiencing a similar event.

Actor-Observer Bias

This psychological bias describes a tendency to attribute one’s own actions to external factors, while attributing others’ actions to their character or disposition.