A bond has a $1,000 par value, makes annual coupon payments…
A bond has a $1,000 par value, makes annual coupon payments of $100, has 5 years to maturity, cannot be called, and is not expected to default. The bond should sell at a premium if current market rates are below 10% for the bond and at a discount if current market rates are greater than 10% for the bond.
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