Question: What condition must exist if a bonds coupon rate is to equal both the bonds current yield and its yield to maturity? Assume the market
What condition must exist if a bonds coupon rate is to equal both the bonds current yield and its yield to maturity? Assume the market rate of interest for this bond is positive.
A. The clean price of the bond must equal the bonds dirty price.
B. The bond must be a zero coupon bond and mature in exactly one year.
C. The market price must exceed the par value by the value of one years interest.
D. The bond must be priced at par.
E. There is no condition under which this can occur.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
