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
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 ...
The solution explains the impact on bond price of coupon rate and bond's yield