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Bond Price

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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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 ...

Solution Summary

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