If the current market price of a bond is less than the present value of the income stream the bond will produce,the price will ________ due to excess ________ of/for the bond.

Question

Quizplus · Accepted Answer

When the current market price of a bond is less than the present value of its income stream, it indicates the bond is undervalued. This undervaluation typically leads to increased demand as investors seek to capitalize on the opportunity, which in turn drives the price up.

If the Current Market Price of a Bond Is Less