If the Purchase Price of a Bond Exceeds the Face

question 113

Multiple Choice

If the purchase price of a bond exceeds the face value, the yield to maturity:

• A) is greater than the coupon rate because the capital gain is positive.
• B) will equal the current yield.
• C) will be less than the coupon rate because the capital gain will be negative.
• D) will be greater than the current yield.

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