Monday, February 8, 2010

Bonds selling at a premium price offer a higher current yield than bonds selling at par value. TRUE OR FALSE?

Bonds selling at a premium price offer a higher current yield than bonds selling at par value. TRUE OR FALSE???Bonds selling at a premium price offer a higher current yield than bonds selling at par value. TRUE OR FALSE?
False. Bonds price is inverse to yield. When you pay more for bond, you get less (effective) interest, or yield.
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