A bond that was issued one year ago and has 7 more years until maturity,...
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Accounting
A bond that was issued one year ago and has 7 more years until maturity, a yield to maturity (YTM) of 6.00%, and a price of $878.01. The bonds par value of $1,000 is returned at maturity. Which of the following is true of the coupon rate of this bond?
The coupon rate, defined as the YTM times the price, must be 6.00%.
The coupon rate is above the YTM because the bonds price is below the par value.
The coupon rate equals the YTM because the bonds price is below the par value.
The coupon rate is below the YTM because the bonds price is below the par value.
The coupon rate, defined by the bond price divided by the par value, is 94.00%.
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