(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