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Suppose a bond is purchased at a discount and YTM does not change throughout the life...

Suppose a bond is purchased at a discount and YTM does not change throughout the life of the bond. As the bond gets closer to maturity, the price of the bond _____. A. decreases B. stays the same C. increases

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Expert Solution

C) Increase

If YTM remains constant, Price of the discounted bond would increase over the time, until it reaches its par value.

jeff jeffy answered 2 years ago
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