Which of the Following Statements Is CORRECT

question 85

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at par,its current yield equals its yield to maturity.
• B) If a coupon bond is selling at a discount,its price will continue to decline until it reaches its par value at maturity.
• C) If interest rates increase,the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.
• D) If a bond's yield to maturity exceeds its annual coupon,then the bond will trade at a premium.
• E) If a coupon bond is selling at a premium,its current yield equals its yield to maturity.

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Definitions:

Desire

A strong feeling of wanting to have something or wishing for something to happen.

Generalization

The process or method of formulating general concepts by abstracting common properties of specific instances.

Specific Conclusion

A definite and detailed end statement in an argument or presentation, drawn from the information and analysis provided beforehand.

Deduction

The process of reasoning from general principles to specific conclusions, or the elimination of possible causes until only one remains.