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Understanding the bond formulas and Par valued bonds for exam FM
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So for a bond priced at prices at par, the face value, redemption amount, and price are all equal to each other if my understanding is correct. If that is the case then using the premium discount formula, I get the result that the yield has to equal the coupon rate for a par valued bond. Am I correct or am I missing something?
P = (Fr -ci)a angle n c P=F=C implies P =(Fr - Fi)a angle n c Implies Fr - Fi =0 So r =i
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