Question
If the yield to maturity and the coupon rate are the same, then the bond should sell for ______.
a. a premium b. a discount c. par value
a. a premium b. a discount c. par value
Answers
GPT-4o mini
If the yield to maturity and the coupon rate are the same, then the bond should sell for **c. par value**.
When the coupon rate equals the yield to maturity, the present value of the future cash flows (coupon payments and the face value at maturity) is equal to the bond's face value.
When the coupon rate equals the yield to maturity, the present value of the future cash flows (coupon payments and the face value at maturity) is equal to the bond's face value.