10-Year Bond Pays an Annual Coupon, Its YTM Is 8

question 36

Multiple Choice

10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium.Which of the following statements is CORRECT?

• A)The bond's current yield is less than 8%.
• B)If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
• C)The bond's coupon rate is less than 8%.
• D)If the yield to maturity increases, then the bond's price will increase.
• E)If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.

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Definitions:

Economic Development

The process through which a nation improves the economic, political, and social well-being of its people.

Saving and Investment

The act of setting aside income for future use and the use of those savings for purchasing capital goods or financial assets.

Productivity of Labor

The measure of output per worker or per hour worked, indicating how effectively labor inputs are converted into goods or services.

Labor Supply

The total number of people available to work, either already employed or actively looking for work.