What Condition Must Exist If a Bond's Coupon Rate Is

question 50

Multiple Choice

What condition must exist if a bond's coupon rate is to equal both the bond's current yield and its yield to maturity? Assume the market rate of interest for this bond is positive.

• A)The clean price of the bond must equal the bond's dirty price.
• B)The bond must be a zero coupon bond and mature in exactly one year.
• C)The market price must exceed the par value by the value of one year's interest.
• D)The bond must be priced at par.
• E)There is no condition under which this can occur.

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