A 5-year corporate bond paying an annual coupon of 8% is sold at a price reflecting a yield-to-maturity of 6% per year. One year passes and the interest rates remain unchanged. If the term structure is flat and all other factors is constant，the bond's price during this period will have:
A. Increased.
B. Decreased.
C. Remained constant.
D. Cannot be determined with the data given
Answer:B
Since, the bond is sold at a premium. As time passes, the bond price will move towards par. Hence the price will decrease.
-
关注公众号
快扫码关注
公众号吧
- 赞100
