An 8 percent corporate bond that pays interest semi-annually was issued last yea

Question

An 8 percent corporate bond that pays interest semi-annually was issued last year. Which two of the following most likely apply to this bond today if the current yield-to-maturity is 7 percent:
I. a structure as an interest-only loan
II. a current yield that equals the coupon rate
III. a yield-to-maturity equal to the coupon rate
IV. a market price that differs from the face value

A. I and III only
B. I and IV only
C. II and III only
D. II and IV only
E. III and IV only


I chose B. I and IV only, would you agree?

Explanation / Answer

yes. B.

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