Question: Type Issue Date Price Coupon Rate Maturity Date YTM Current Yield Rating Note Aug 2000 79.38 4.50% 8-15-2010 5.669% AAA Treasury notes and bonds. Use

Type Issue Date Price Coupon Rate Maturity Date YTM Current Yield Rating Note Aug 2000 79.38 4.50% 8-15-2010 5.669% AAA

Treasury notes and bonds. Use the information in the following table:

Assume a $100,000 par value. What is the yield to maturity of the August 2000 Treasury bond with semiannual payment? Compare the yield to maturity and the current yield

How do you explain this relationship?

Compare the yield to maturity and the current yield. How do you explain this relationship?(Select the best response.)

A. There is no certain relationship between the yield to maturity and the current yield.

B. If a bond sells at a premium, the yield to maturity is greater than the current yield. Your answer is not correct.

C. If a bond sells for its par value, the yield to maturity is greater than the current yield.

D. If a bond sells at a discount, the yield to maturity is greater than the current yield.

present date February 15, 2008

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