Asked by Greatdanelola

describe the relationship between the coupon rate and the required rate of return that will result in a bond selling at:
a - a discount
b - face value
c - a premium
Answered by drwls
If you bought a bond that paid a coupon (interest) rate less than prevailing interest rates for that rating and maturity, would you pay face (maturity)value for the bond? I wouldn't. Use similar reasoning to deduce your own answers.
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