Which of the following statements is true of the price of a bond that is less than the bond's face value?
A) As the coupon rates remain constant, the market value of the bond remains unchanged.
B) The price of the bond will decrease further below the bond's face value when the rates in the market are too high
C) The price of the bond will increase as the bond gets closer to its maturity because the bond's value has to equal its face value at maturity.
D) The market value of the bond will increase with the interest received at the maturity of the bond.
E) The par value of the bond will increase with an increase in the bond price in the market until maturity.
Correct Answer:
Verified
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