Two Bonds Are Identical in Risk, Maturity Date, and Face

question 115

Multiple Choice

Two bonds are identical in risk, maturity date, and face value, but one coupon rate is 10% and the other is 8%. The market yield on similar bonds is 9%.

• A)The 10% coupon bond would be selling at a premium and the 8% coupon bond would be selling at a discount.
• B)The 10% coupon bond would be selling at a discount and the 8% coupon bond would be selling at a premium.
• C)At the maturity date, both bonds would be selling at face value.
• D)a and c

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Definitions:

Goal Alignment

The process of ensuring that individual, team, and organizational objectives are in agreement and contribute to the company's strategy.

Forecasting

The process of making predictions about the future based on past and present data analysis, often used in business for planning purposes.

Internal Labour Force

Employees who are currently working within an organization, as opposed to external candidates or contractors.

Staffing Table

A tool used in human resources planning that lists all current and projected job positions in an organization, along with other critical information such as the number of people needed for each role.