Bond Price
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Explain why the relationship between a bond's yield and its coupon rate determines whether a bond will be price at par, at a premium or at a discount
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The solution explains the impact on bond price of coupon rate and bond's yield
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When a bond is priced at par it means it is sold at the same price as the face value. A premium bond is sold at a price higher than the face value and a disocunt bond is sold at a price lower than the face value. The coupon rate is the interest that is paid ...
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