3. Which of the following is true (Points : 6) a. When a bond is selling at a pr

Question

3. Which of the following is true (Points : 6)
a. When a bond is selling at a premium the yield to maturity is greater than the current yield
b. When the bond is selling at a dscount the yield to maturity is less than the current yield
When the bond is selling at a premium the yield to maturity is greater than the coupon rate
When the bond is selling at a discount the current yield is less than the coupon rate
e. When the bond is selling at par the coupon rate is higher that the market interest rate (kb).

Explanation / Answer

b. When the bond is selling at a dscount the yield to maturity is less than the current yield

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