Question

A corporate bond with a 8 percent coupon was issued last year. Which one of these...

A corporate bond with a 8 percent coupon was issued last year. Which one of these would apply to this bond today if the yield to maturity is 7 percent?

Select one:

a.

The current yield drops below the yield to maturity.

b.

The coupon rate has decreased to 7 percent.

c.

The bond is selling at par value.

d.

The bond is currently selling at a premium.

e.

The current yield exceeds the coupon rate.
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