A 20-year bond pays 6% annually on a face value of $1,000. If similar bonds are currently yielding 4%, what is the market value of the bond? Use time value of money tables in Appendix B and Appendix D.
A) $1,271.40
B) $573.50
C) $770.80
D) Not enough information is given to tell.
A) $1,271.40
All else being equal, when the yield to maturity is less than the coupon/face rate, the bond will be priced above par:
Business
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