(Q 24 IN B) WHICH OF THE FOLLOWING STATEMENTS ABOUT A BOND’S COUPO...

28. (Q 24 in B) Which of the following statements about a bond’s coupon rate,

current yield, and yield to maturity (YTM) is correct?

A) When the bond sells at a premium, its coupon rate is higher than the current

yield, and its coupon rate is also higher than the YTM.

B) When the bond sells at a premium, its coupon rate is lower than the current

yield, and its coupon rate is higher than the YTM.

C) When the bond sells at a discount, its coupon rate is higher than the current

yield, and its coupon rate is lower than the YTM.

D) When the bond sells at a discount, its coupon rate is lower than the current

Answer A