Which of the Following Statements Is Correct

question 40

Multiple Choice

Which of the following statements is correct?

• A) The discount or premium on a bond can be expressed as the difference between the coupon payment on an old bond which originally sold at par and the coupon payment on a new bond,selling at par,where the difference in payments is discounted at the new market rate.
• B) The price of a coupon bond is determined primarily by the number of years to maturity.
• C) On a coupon paying bond,the final interest payment is made one period before maturity and then,at maturity,the bond's face value is paid as the final payment.
• D) The actual capital gains yield for a one-year holding period on a bond can never be greater than the current yield on the bond.
• E) All of the above statements are false.

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