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adnan_buljic adnan_buljic
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9 months ago
Which statement regarding bonds is true?


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If a 20-year, $1,000 par, 9% coupon bond was issued at par, and if interest rates then dropped to the point where rd= YTM = 6%, we could be sure that the bond would sell at a discount below its $1,000 par value.



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If a 20-year, $1,000 par, zero coupon bond was issued at a price that gave investors a 9% yield to maturity, and if interest rates then dropped to the point where rd = YTM = 6%, the bond would sell at a premium above its $1,000 par value.



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Other things held constant, a callable bond would have a higher required rate of return than a noncallable bond.



▸

People often call a downward-sloping yield curve a normal yield curve and a yield curve that slopes upward an inverted, or abnormal, yield curve.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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wellsarwellsar
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adnan_buljic Author
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9 months ago
Helped a lot
SUmmerPeople
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This helped my grade so much Perfect
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Just got PERFECT on my quiz
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