Which Statement Regarding Bonds Is True

question 43

Multiple Choice

Which statement regarding bonds is true?

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

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