Which of the following bonds would you prefer to be buying?
A)a $10,000 face-value security with a 10 percent coupon selling for $9,000
B)a $10,000 face-value security with a 7 percent coupon selling for $10,000
C)a $10,000 face-value security with a 9 percent coupon selling for $10,000
D)a $10,000 face-value security with a 10 percent coupon selling for $10,000

Question

Quizplus · Accepted Answer

A bond selling for less than its face value (at a discount) with a high coupon rate offers a higher yield compared to bonds selling at or above their face value with lower or equal coupon rates.

Which of the Following Bonds Would You Prefer to Be