Johnson Products issued $1,000 face value 20-year bonds five years ago
These bonds are currently selling for $1,218.47. From this information we can conclude that the Johnson Products bonds have a yield-to-maturity greater than the coupon rate on these bonds.
Indicate whether the statement is true or false.
Answer: FALSE
Explanation: Prices and interest rates are inversely related. Therefore, a higher price means the yield-to-maturity is less than the original coupon rate.
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Answer the following statement true (T) or false (F)
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