Homework SourseThe lower is the discount rate A higher is the ytm B lower i
The lower is the discount rate
A higher is the ytm
B lower is the ytm
C higher is a bonds value
D both a and c
The lower is the discount rate
A higher is the ytm
B lower is the ytm
C higher is a bonds value
D both a and c
A higher is the ytm
B lower is the ytm
C higher is a bonds value
D both a and c
Solution
Bond value is inversely propotional to the discount rate because it is the discounted present value of the future payments.
So lower the discount rate, Higher the Bond Value
So answer is C
YTM and discount rate are one of the same thing
