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

question 31

Multiple Choice

A 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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Definitions:

Somatic Nervous System

Part of the peripheral nervous system associated with the voluntary control of body movements via skeletal muscles.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem down the back, and transmits neural signals between the brain and the body.

Urinary Bladder

A hollow muscular organ that stores urine from the kidneys before it is excreted from the body.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight or flight response to stress or emergency situations.