Bond Trading Below Par


1. Which of the following statements is FALSE?

A. Zero-coupon bonds are also called pure discount bonds.
B. The internal rate of return (IRR) of an investment opportunity is the discount rate at which the net present value (NPV) of the investment opportunity is equal to zero.
C. The yield to maturity for a zero-coupon bond is the return you will earn as an investor from holding the bond to maturity and receiving the promised face value payment.
D. When prices are quoted in the bond market, they are conventionally quoted in increments of $1000.

2. A bond is currently trading below par. Which of the following must be true about that bond?

A. The bond’s yield to maturity is less than its coupon rate.
B. The bond is a zero-coupon bond.
C. The bond’s yield to maturity is greater than its coupon rate.
D. B and C above.


These short questions belong to Finance. Both the questions are about finding true and false statements.

Total Word Count NA

Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.