If Bond Yields Rise Above the Coupon Rate, the Bond

question 63

True/False

If bond yields rise above the coupon rate, the bond will trade at a discount to its face value.

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Definitions:

Liquidity

Money or things that can be quickly and easily converted into money with little or no loss of value.

Profits

The financial gain that is achieved when the amount of revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the principle.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance federal government spending, including Treasury bills, notes, and bonds.