Assume a semi-annual coupon bond matures in 3 years, has a face value of $1,000, a current market price of $1,089, and a 5 percent coupon. Which one of the following statements is correct concerning this bond?

Multiple Choice

• The bond will pay less annual interest now than when it was originally issued.

• The current coupon rate is greater than 5 percent.

• The bond is a money market instrument.

• The current yield is less than the coupon rate.

• The bond will pay semi-annual payments of $50 each.