Which of the following statements is CORRECT?
A) A zero coupon bond's current yield is equal to its yield to maturity.
B) If a bond's yield to maturity exceeds its coupon rate, the bond
Will sell at par.
C) All else equal, if a bond's yield to maturity increases, its price
Will fall.
D) If a bond's yield to maturity exceeds its coupon rate, the bond
Will sell at a premium over par.
E) All else equal, if a bond's yield to maturity increases, its current yield will fall.

Question

Quizplus · Accepted Answer

When a bond's yield to maturity increases, its price falls because the present value of its future cash flows decreases.

Which of the Following Statements Is CORRECT