easy · Principles of Finance valuation
A 5-year bond with a face value of $1,000 pays an annual coupon of 4%.
If the current market interest rate for similar bonds is 6%, how will the bond be priced in the market?
- The price is independent of interest rates
- At a discount (below $1,000)
- At par value ($1,000)
- At a premium (above $1,000)
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