A 10-year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT?
A) the bond is selling below its par value.
B) the bond is selling at a discount.
C) if the yield to maturity remains constant, the bond's price one year from now will be lower than its current price.
D) the bond's current yield is greater than 9%.
E) if the yield to maturity remains constant, the bond's price one year from now will be higher than its current price.
Correct Answer:
Verified
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