A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a
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Question:
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT?
The bond's current yield is less than 8%.
If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
If the yield to maturity increases, then the bond's price will increase.
If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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