General Studies · Financial Management
Which of the following statements regarding bond valuation is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The required rate of return has no relationship with the par value of a bond.
- 2When the required rate of return is less than the nominal rate, the value of the bond is less than its par value.✓
- 3If the required rate of return is greater than the nominal rate, the value of the bond is more than its par value.
- 4When the required rate of return is equal to the nominal (coupon) rate, the value of the bond is equal to its par value.
Correct answer
When the required rate of return is less than the nominal rate, the value of the bond is less than its par value.
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