The coupon rate of cafe bonds

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1. The coupon rate of Cafe bonds is greater than the yield-to-maturity of these Cafe bonds. Which of the following assertions is most likely to be true?

A. The Cafe bonds sell at a discount in the primary market.

B. The Café bonds sell at a premium in the secondary market.

C. The Cafe bonds sell at a discount in the secondary market.

D. The Cafe bonds sell at a premium in the primary market.

2. Bond XYZ and bond ABC both pay annual coupons, mature in 5 years, have a face value of $1000, and have the same yield-to-maturity. Bond XYZ has a coupon rate of 8.0 percent and is priced at $1,029.72. Bond ABC has a coupon rate of 6.5 percent. What is the price of bond ABC?

Reference no: EM131620843

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