(Q23 IN TYPE B) WHICH OF THE FOLLOWING IS CORRECT FOR A BOND CURRE...

27. (Q23 in Type B) Which of the following is correct for a bond currently selling at a premium? A) Its current yield is higher than its coupon rate. B) Its current yield is lower than its coupon rate. C) Its yield to maturity is higher than its coupon rate. D) Its default risk is extremely low. Solution: B