Question

    A bond with face value ₹1,000 pays 8% annual coupon.

    If market yield for similar bonds is 10%, price of the bond (approx) will be:
    A Above ₹1,000 Correct Answer Incorrect Answer
    B Exactly ₹1,000 Correct Answer Incorrect Answer
    C Below ₹1,000 Correct Answer Incorrect Answer
    D Zero Correct Answer Incorrect Answer
    E Indeterminate Correct Answer Incorrect Answer

    Solution

    Coupon < market yield → bond trades at discount (price < par).

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