For a bond selling at par value, which of the following relationships is true

Question

Quizplus · Accepted Answer

When a bond is selling at par value, its coupon rate is equal to the bond's yield to maturity and the current yield. This is because the bond's yield to maturity represents the total return that an investor would receive if they bought the bond at its market price (which is par value for a bond selling at par), held it until maturity, and received all of the coupon payments and the principal repayment. The current yield represents the bond's annual coupon payments divided by its current market price. Since the current market price is the same as the par value for a bond selling at par, the current yield and the coupon rate would be the same. Therefore, all three measures (coupon rate, current yield, and yield to maturity) are equal for a bond selling at par value.

For a Bond Selling at Par Value, Which of the Following