Suppose that you are reviewing a price sheet for bonds and see the following prices (per $100 face value)reported. Without calculating the price of each bond, which bond seems to be reported incorrectly? $$\begin{array} { | c | c | c | c | }
\hline \text { Bond } & \text { Price } & \text { Coupon Rate } & \text { Yield } \
\hline \mathrm { V } & 100 & 6 \% & 6 \% \
\hline \mathrm { W } & 110 & 8 \% & 6 \% \
\hline \mathrm { X } & 95 & 0 \% & 5 \% \
\hline \mathrm { Y } & 107 & 7 \% & 9 \% \
\hline \mathrm { Z } & 90 & 6 \% & 9 \% \
\hline
\end{array}$$

Question

Suppose that you are reviewing a price sheet for bonds and see the following prices (per $100 face value)reported. Without calculating the price of each bond, which bond seems to be reported incorrectly? $$\begin{array} { | c | c | c | c | } 
\hline \text { Bond } & \text { Price } & \text { Coupon Rate } & \text { Yield } \
\hline \mathrm { V } & 100 & 6 \% & 6 \% \
\hline \mathrm { W } & 110 & 8 \% & 6 \% \
\hline \mathrm { X } & 95 & 0 \% & 5 \% \
\hline \mathrm { Y } & 107 & 7 \% & 9 \% \
\hline \mathrm { Z } & 90 & 6 \% & 9 \% \
\hline
\end{array}$$

Quizplus · Accepted Answer

Bond Y is reported incorrectly because a bond with a coupon rate of 7% and a yield of 9% should be priced below its face value, not above it at 107.

Suppose That You Are Reviewing a Price Sheet for Bonds