Which statement regarding bond yields is true?

Question

Quizplus · Accepted Answer

When a bond's yield to maturity increases, its price falls because investors will demand a discount to compensate for the lower interest payments they will receive compared to newly issued bonds with higher yields. A zero coupon bond's current yield is not equal to its yield to maturity (A is incorrect). If a bond's yield to maturity exceeds its coupon rate, the bond will sell at a discount below par, not at par or at a premium over par (B and D are incorrect).

Which Statement Regarding Bond Yields Is True