21 Jan 2021

a 10 year bond pays an annual coupon

A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? Answer The bond's current yield is less than 8%. If the yield to maturity remains at 8%, then the bond's price will decline over the next year. The bond's coupon rate is less than 8%. If the yield to maturity increases, then the bond's price will increase. If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.

Tshego Monchusi
21 Jan 2021

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