Question
When the coupon of a bond is less than the market risk
free interest rate, it will trade atSolution
When a bond has a YTM > than its coupon rate, it sells at a discount from its face value. When a bond has a YTM = to the coupon rate, the market price equals the face value. When a bond has a YTM < the coupon rate, the bond sells at a premium over face value.
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