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28 Nov 2020
A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is CORRECT?
a. The bond's expected capital gains yield is zero.
b. The bond's yield to maturity is above 9%
c. The bond's current yield is above 9%
d. If the bond's yield to maturity declines, the bond will sell at a discount.
e. The bond's current yield is less than its expected capital gains yield
A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is CORRECT?
a. The bond's expected capital gains yield is zero.
b. The bond's yield to maturity is above 9%
c. The bond's current yield is above 9%
d. If the bond's yield to maturity declines, the bond will sell at a discount.
e. The bond's current yield is less than its expected capital gains yield
manhokwe tawandaLv10
25 Jan 2021
Related questions
If a bond is currently trading at its face (par) value, then it must be the case that:
| the bond's yield to maturity is less than its coupon rate. | ||
| the bond's yield to maturity is greater than its coupon rate. | ||
| the bond is a zero-coupon bond. | ||
| the bond's yield to maturity is equal to its coupon rate. |
