#9 Which one of the following statements is correct concerning premium bonds? Th
ID: 2654380 • Letter: #
Question
#9
Which one of the following statements is correct concerning premium bonds?
The premium increases when interest rates increase.
The coupon rate is less than the current yield.
As the time to maturity decreases, the premium increases.
The yield to maturity is less than the coupon rate.
The par value exceeds the face value.
The premium increases when interest rates increase.
The coupon rate is less than the current yield.
As the time to maturity decreases, the premium increases.
The yield to maturity is less than the coupon rate.
The par value exceeds the face value.
Explanation / Answer
Which one of the following statements is correct concerning premium bonds?
The yield to maturity is less than the coupon rate.
Note :
The premium increases when interest rates decrease.
The coupon rate is more than the current yield.
As the time to maturity decreases, the premium decreases
The current value exceeds the face value concerning premium bonds
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