A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium.Which of the following statements is CORRECT?
A) If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
B) The bond's coupon rate is less than 8%.
C) If the yield to maturity increases, then the bond's price will increase.
D) If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.
E) The bond's current yield is less than 8%.
Correct Answer:
Verified
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