Which of the following statements is CORRECT?
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.
E)If a bond is selling at a premium, this implies that its yield to maturity exceeds its coupon rate.

Question

Quizplus · Accepted Answer

If a coupon bond is selling at par, its coupon rate equals its yield to maturity, which also equals its current yield.

Which of the Following Statements Is CORRECT