Question

Which of the following observations regarding the valuation of bonds is correct?

A. For a given change in the required return, the shorter its maturity, the greater the change in the market value of the bond.
B. When the market rate of return is less than the stated coupon rate, the market value of the bond will be more than its face value, and the bond will be selling at a premium.
C. When interest rates rise so that the required rate of return increases, the market value of the bond will increase.
D. The market value of a discount bond is greater than its face value during a period of rising interest rates

Answer 1

I think the correct awnser is D-The market value of a discount bond is greater than its face calue during a period of rising intrest rates

Step-by-step explanation: