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If a $10,000 Bond,with a 12% Coupon Rate,is Trading at 100,what

Question 58

Multiple Choice

If a $10,000 bond,with a 12% coupon rate,is trading at 100,what can be said about the current price and current yield of the bond?


A)  Current Price  Current Yield $10,000 Greater than 12%\begin{array}{ll}\underline{ \text { Current Price } }& \underline{ \text { Current Yield }}\\\$ 10,000 &{\text { Greater than } 12 \%} \\\end{array}

B)  Current Price  Current Yield $10,000 Equal to 12%\begin{array}{lccc}\underline{ \text { Current Price } }& \underline{ \text { Current Yield }}\\\$ 10,000 & \text { Equal to } 12 \% \\\end{array}

C)  Current Price  Current Yield $10,000 Less than 12%\begin{array}{lccc}\underline{ \text { Current Price } }& \underline{ \text { Current Yield }}\\\$ 10,000 & \text { Less than } 12 \%\\\end{array}

D)  Current Price  Current Yield $11,200 Equal to 12%\begin{array}{lccc}\underline{ \text { Current Price } } & \underline{ \text { Current Yield }}\\\$ 11,200 & \text { Equal to } 12 \% \\\end{array}

E)  Current Price  Current Yield $11,200 Less than 12%\begin{array}{lccc}\underline{ \text { Current Price } }&\underline{ \text { Current Yield }}\\\$ 11,200 & \text { Less than } 12 \%\\\end{array}

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