Question
A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? a) The bond sells
A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT?
a) The bond sells at a price below par.
b) The bond has a current yield greater than 8%.
c) The bond sells at a discount.
d) The bonds required rate of return is less than 7.5%.
e) If the yield to maturity remains constant, the price of the bond will decline over time.
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Applied Quantitative Finance
Authors: W.; T. Kleinkow; G. Stahl Hardle
1st Edition
3540434607, 978-3540434603
