A corporate bond has a coupon rate of 9%,a face value of $1,000,and matures in 15 years.Which of the following statements is MOST correct?

Question

Quizplus · Accepted Answer

If the investor buys the bond for $900, they will receive annual coupon payments of $90 (9% of $1,000) for 15 years, totaling $1,350. At maturity, they will receive the face value of $1,000. The total future cash flows amount to $2,350. 
To calculate the yield to maturity (YTM), we can use a financial calculator or Excel. Using Excel, we can use the YIELD function and input the following variables: settlement date, maturity date, coupon rate, bond price, and face value. 
The YTM comes out to around 10.9%, which is greater than the coupon rate of 9%. Therefore, the correct statement is C.

A Corporate Bond Has a Coupon Rate of 9%,a Face