1) Which of the following statements is correct?

a) If a bond is at a discount, the coupon rate is less than the current yield, which is less than YTM.

b) Current yield is the ratio of annual coupon payment divided by the par value.

c) When the coupon rate is higher than the market rate, the bond is priced at a discount.

d) When the market rate is higher than the coupon rate, the bond is priced at a premium.

2) What is the yield to maturity on an 8-year, 10-percent bond that pays interest semi-annually, which is now priced at $972? Use a financial calculator.

a)10 percent

b)10.53 percent

c)10.03 percent

d) 5.26 percent