1. Which of the following statements is correct? a. Rising inflation makes the actual yield to maturity on a bond greater than the quoted yield to maturity which is based on market prices. b. The yield to maturity for a coupon bond that sells at its par value consists entirely of an interest yield; it has a zero expected capital gains yield. c. On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss. d. The market value of a bond will always approach its par value as its maturity date approaches. This holds true even if the firm enters bankruptcy. e. All of the above statements are false