Bond coupon rate is equal to the market rate of interest

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Reference no: EM131882280

1. Which one of the following statements about bond price is NOT true?

To compute a bond's price, one needs to calculate the present value of the bond's expected cash flows.

The value, or price, of any asset is the future value of its cash flows.

The required rate of return, or discount rate, for a bond is the market interest rate called the bond's yield to maturity.

The expected future cash flows are estimated using the coupons that the bond will pay and the maturity value to be received.

2. If a bond's coupon rate is equal to the market rate of interest, then the bond will sell

at a price equal to its face value.

at a price greater than its face value.

at a price less than its face value.

None of the above is true.

Reference no: EM131882280

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