Question 1
A $1,000 face value bond has a coupon yield of 12.02%. The bond has a coupon rate of 13%. What is the price of the bond?
◦ $1,000
◦ $1,082
◦ $1,202
◦ $1,300
◦ Cannot be determined without more information.
Question 2
A bond sells at a discount when
◦ its price equals its face value.
◦ its price exceeds its face value.
◦ an investor does not receive periodic interest payments from a coupon bond.
◦ its price is lower than its face value.
◦ the broker charges a low commission on the sale.