Which of the Following Statements Is CORRECT

question 28

Multiple Choice

Which of the following statements is CORRECT?

• A) If rates fall after its issue, a zero coupon bond could trade at a price above its par value.
• B) If rates fall rapidly, a zero coupon bond's expected appreciation could become negative.
• C) If a firm moves from a position of strength toward financial distress, its bonds' yield to maturity would probably decline.
• D) If a bond is selling at a premium, this implies that its yield to maturity exceeds its coupon rate.
• E) If a coupon bond is selling at par, its current yield equals its yield to maturity.

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