Which of the Following Statements Is CORRECT

question 38

Multiple Choice

Which of the following statements is CORRECT?

• A) If a bond is selling at a discount to par,its current yield will be greater than its yield to maturity.
• B) All else equal,bonds with longer maturities have less price risk than bonds with shorter maturities.
• C) If a bond is selling at its par value,its current yield equals its capital gains yield.
• D) If a bond is selling at a premium,its current yield will be less than its capital gains yield.
• E) All else equal,bonds with larger coupons have less price risk than bonds with smaller coupons.

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Definitions:

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