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A bond issued by the Needy Corporation pays an 8% coupon, matures in ten years, and is selling for its face value of $1,000. The yield-to-maturity on this bond is:
Suggested Answer: C
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Since the bond is selling for its face value, its yield-to-maturity is equal to its coupon rate.
30 comments · newest first
LE
Leatha
7 months ago
I’m sticking with C. The info given supports that conclusion.
CY
Cyndy
7 months ago
I still believe it could be less than 8%. Just a thought.
AL
Aleta
7 months ago
But what if interest rates change? Could that affect it?
EL
Elliot
7 months ago
I feel confident about option C. It’s straightforward.
NO
Noble
7 months ago
Yeah, since it's selling at face value, it makes sense.
AU
Audrie
8 months ago
I thought it could be less if interest rates rise?
EU
Eugene
8 months ago
Definitely C, no doubt about it!
HE
Helene
8 months ago
Wait, how can we be sure without more info?
JE
Jess
9 months ago
Totally agree, it's 8%!
DE
Delisa
9 months ago
It's selling at face value, so yield equals coupon rate.
AG
Agustin
9 months ago
I'm stumped. This question is as confusing as trying to understand bond pricing. Where's the "I have no idea" option?
SH
Shad
9 months ago
I'm going with B. Who wouldn't want a bond that pays more than 8%? Sign me up!
GI
Gianna
9 months ago
C is the right answer. If the bond is selling at its face value, the yield-to-maturity must be equal to the coupon rate.
HO
Hoa
9 months ago
D is the correct answer. We don't have enough information to determine the yield-to-maturity without knowing the current market price of the bond.
BA
Bambi
10 months ago
I’m a bit confused. I thought yield-to-maturity could be indeterminable sometimes, but this seems straightforward. I lean towards C, but I’m not 100% sure.
GE
Gearldine
10 months ago
I practiced a similar question where the bond was at a discount, and the yield was higher than the coupon rate. But here, since it's at face value, I think it should be C.
DA
Daniel
10 months ago
I'm not entirely sure, but I feel like if the bond is at face value, the yield-to-maturity could be less than the coupon rate. Maybe it's A?
LA
Larue
10 months ago
I remember that when a bond sells at face value, the yield-to-maturity is usually equal to the coupon rate. So, I think it might be C.
AN
Annett
10 months ago
I've got this! If the bond is selling at par, then the yield-to-maturity has to be equal to the coupon rate. The answer is C.
ME
Merrilee
10 months ago
Hmm, I'm not sure. The information provided doesn't seem complete. I might need to do some calculations to determine the yield-to-maturity. I'll have to think about this one.
ST
Stefania
11 months ago
I think the yield-to-maturity is equal to the coupon rate.
KE
Keva
11 months ago
I think the answer is B. The bond is selling at its face value, so the yield-to-maturity should be greater than the coupon rate.
MA
Marjory
11 months ago
Okay, let me think this through. The bond is paying an 8% coupon and is selling at its face value of $1,000. So the yield-to-maturity must be equal to the coupon rate of 8%. I'll go with C.
HU
Huey
11 months ago
I'm a bit confused. If the bond is selling at par, shouldn't the yield-to-maturity be less than the coupon rate?
JE
Jennie
12 months ago
Hmm, this seems straightforward. The bond is selling at par, so the yield-to-maturity should be equal to the coupon rate.
ON
Ona
6 months ago
Totally straightforward. C it is!
CL
Clorinda
6 months ago
Simple math! No surprises with this one.
RA
Rashad
6 months ago
Exactly! So the answer is C.
RO
Roxanne
7 months ago
I agree, it's pretty clear. Selling at par means YTM equals the coupon rate.
KA
Kasandra
11 months ago
Right, 8% is the yield-to-maturity here.