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FIN test 2
Terms in this set (8)
T/F: The coupon value of a bond is the face value of the bond
T/F: A bond is said to mature on the date when the issuer repays its notional value.
T/F: The only cash payment an investor in a zero-coupon bond receives is the face value of the bond on its maturity date.
T/F: Prior to its maturity date, the price of a zero-coupon bond is its face value.
T/F: Before it matures, the price of any bond is always less than its face value.
T/F: A bond will trade at a discount if its coupon rate is less than its yield to maturity.
T/F: Bonds with a high risk of default generally offer high yields.
T/F: The credit spread of a bond shrinks if it is perceived that the probability of the issuer defaulting increases.
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