Current yield and yield to maturity Answer: e Diff: M
49. Which of the following statements is most correct?
a. If a bond sells for less than par, then its yield to maturity is less than its coupon rate.
b. If a bond sells at par, then its current yield will be less than its yield to maturity.
c. Assuming that both bonds are held to maturity and are of equal risk, a bond selling for more than par with 10 years to maturity will have a lower current yield and higher capital gain relative to a bond that sells at par.
d. Statements a and c are correct.
e. None of the statements above is correct.
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