Which of the following are true for a coupon bond?
A) When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.
B) The price of a coupon bond and the yield to maturity are negatively related.
C) The yield to maturity is greater than the coupon rate when the bond price is below the par value.
D) All of the above are true.
E) Only A and B of the above are true.

Question

Quizplus · Accepted Answer

All the statements provided are true characteristics of a coupon bond. A) describes the relationship between yield to maturity and the coupon rate when the bond is priced at par. B) outlines the inverse relationship between bond price and yield to maturity. C) explains the condition under which the yield to maturity exceeds the coupon rate.

Which of the Following Are True for a Coupon Bond