Is this bond currently trading at a discount, at par, or at a premium? Explain. (Select the best choice below.) A. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount. B. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. C. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. D. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium.

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danishmujtabaqureshi danishmujtabaqureshi · Answer 1 · 2020-03-21T03:46:24+01:00

A. Because the yield to maturity is less than the coupon rate, the bond is trading at a discount. FALSE

Explanation: If the yield to maturity (YTM) is less than the Coupon rate (CR) the bond is trading at a premium

B. Because the yield to maturity is greater than the coupon rate, the bond is trading at par. FALSE

Explanation: If the yield to maturity (YTM) is greater than the Coupon rate (CR) the bond is trading at a discount.

C. Because the yield to maturity is less than the coupon rate, the bond is trading at a premium. TRUE

D. Because the yield to maturity is greater than the coupon rate, the bond is trading at a premium. TRUE