A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at

ID: 2776864 • Letter: A

Question

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?

Select one:

a. If the yield to maturity remains at 8%, then the bond’s price will decline over the next year.

b. The bond’s coupon rate is less than 8%.

c. The bond’s current yield is less than 8%.

d. If the yield to maturity increases, then the bond’s price will increase.

e. If the yield to maturity remains at 8%, then the bond’s price will remain constant over the next year.

A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. statement A is correct

a. If the yield to maturity remains at 8%, then the bond’s price will decline over the next year

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