Use the information for the question(s) below.
The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semi-annually.
-Assuming the appropriate YTM on the Sisyphean bond is 9%,then this bond will trade at
A) a premium.
B) a discount.
C) par.
D) none of the above

Question

Quizplus · Accepted Answer

Since the YTM is higher than the stated coupon rate, the bond will trade at a discount. This is because investors will require a higher yield to compensate for the lower coupon payments.

Use the Information for the Question(s) Below