1) Which one of the following terms refers to a bond's rate of return that is required by the marketplace?

a) Coupon rate

b) Yield to maturity

c) Dirty yield

d) Call yield

e) Discount rate

2) Which one of the following statements is true?

a) The current yield on a par value bond will exceed the bond's yield to maturity.

b) The yield to maturity on a premium bond exceeds the bond's coupon rate.

c) The current yield on a premium bond is equal to the bond's coupon rate.

d) A premium bond has a current yield that exceeds the bond's coupon rate.

e) A discount bond has a coupon rate that is less than the bond's yield to maturity.