Bond concepts Answer: e Diff: E
13. A 10-year corporate bond has an annual coupon payment of 9 percent. The bond is currently selling at par ($1,000). Which of the following statements is most correct?
The bond’s yield to maturity is 9 percent.
The bond’s current yield is 9 percent.
If the bond’s yield to maturity remains constant, the bond’s price will remain at par.
Statements a and c are correct.
All of the statements above are correct.
Bond concepts Answer: a Diff: E
14. A 15-year bond with a face value of $1,000 currently sells for $850. Which of the following statements is most correct?
a. The bond’s yield to maturity is greater than its coupon rate.
b. If the yield to maturity stays constant until the bond matures, the bond’s price will remain at $850.
c. The bond’s current yield is equal to the bond’s coupon rate.
d. Statements b and c are correct.
e. All of the statements above are correct.
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