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If the Yield to Maturity (The Market Rate of Return)

Question 97

Multiple Choice

If the yield to maturity (the market rate of return) of a bond is less than its coupon rate, the bond should be:


A) selling at a discount; i.e., the bond's market price should be less than its face (maturity) value.
B) selling at a premium; i.e., the bond's market price should be greater than its face value.
C) selling at par; i.e., the bond's market price should be the same as its face value.
D) a floating-rate bond yielding market adjusted interest.
E) an indexed bond that adjusts interest payments on the basis of an inflation index.

Correct Answer:

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