easy · Debt Capital Markets bond-instruments-structures
A 10-year corporate bond is issued at a price of 98.00 with a 5.00% coupon.
What phenomenon will cause this bond's price to gradually increase toward 100.00 as it approaches maturity, assuming yields remain constant?
- Accrued interest accumulation.
- Pull to par.
- Convexity adjustment.
- Positive roll-down.
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