10-Year Bond with a 9% Annual Coupon Has a Yield

question 18

Multiple Choice

10-year bond with a 9% annual coupon has a yield to maturity of 8%.Which of the following statements is CORRECT?

• A)If the yield to maturity remains constant, the bond's price one year from now will be higher than its current price.
• B)The bond is selling below its par value.
• C)The bond is selling at a discount.
• D)If the yield to maturity remains constant, the bond's price one year from now will be lower than its current price.
• E)The bond's current yield is greater than 9%.

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