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A $1,000 Face Value Bond Has a Coupon Rate of 5%.Bonds

Question 63

Multiple Choice

A $1,000 face value bond has a coupon rate of 5%.Bonds of similar risk currently yield 7%.This bond should be selling


A) at a premium.
B) for its face value.
C) at a discount.
D) at the price for which Treasury bonds of the same maturity are currently selling.
E) Cannot be determined without further information.

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