If a bond investor's rate of return for a particular period equaled the bond's coupon rate, then during that period, the bond's price:
A) increased.
B) decreased.
C) remained constant.
D)changed, but the direction of the change is irrelevant.

Question

Quizplus · Accepted Answer

When a bond investor's rate of return equals the bond's coupon rate, it means that the bond's price remained the same because the coupon payments received by the investor are equal to the yield on the bond. Therefore, the bond's price does not need to adjust to meet the investor's required rate of return, and it remains constant.

If a Bond Investor's Rate of Return for a Particular