All else equal, which of the following bond has the lowest market price? Select one: a. A bond with a 7% coupon. b. A bond with a 6% coupon. c. A bond with a 5% coupon. d. A bond with a 9% coupon. e. A bond with a 10% coupon.

b. A bond with a 6% coupon.

Explanation:

All else equal, the bond with the lowest coupon payment (in this case, the bond with a 6% coupon) is the bond that will have the lowest price, simply because the coupon represents the periodic interest that the bondholder will get, and in general terms, the less interests a bond pays, the cheaper its price.

Besides, a lower coupon rate is more likely to be lower than the prevailing interest rate in the market, which is one of the most important factors when determining the price of a coupon.

answer; (inseparability);