A 10-year annual payment corporate coupon bond has an expected return of 11 percent and a required return of 10 percent. The bond's market price is

Name: A 10-year annual payment corporate coupon bond has an expected return of 11 percent and a required return of 10 percent. The bond's market price is
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Question

Quizplus · Accepted Answer

The bond's required rate of return is less than its expected return, so the market price must be less than its present value. Hence, the correct option is D.

A 10-Year Annual Payment Corporate Coupon Bond Has an Expected