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a) True b) False A call feature will have no impact on the value of a bond if interest rates rise. The term and duration of a bond are equal for zero coupon bonds. If a $1,000 bond with a 7 percent coupon were to sell for $978, the current interest rate exceeds 7 percent. If a bond sells for a premium, the current yield exceeds the yield to maturity. The smaller a bond's coupon implies a longer duration. If a $1,000 bond has a coupon of 8 percent and matures after eight years, the price of the bond will exceed $1,000 if the current interest rate is 9 percent.Explanation / Answer
15. False
16. false
17. true
18. true
19. true
20.true
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