The return to bondholders is guaranteed to equal the yield to maturity only if the bond is held until maturity.

True

False

The discount rate that makes the present value of a bond's payments equal to its price is termed the:

A.

dividend yield

B.

yield to maturity

C.

current yield

D.

coupon rate

Assume a bond is currently selling at par value. What will happen in the future if the yield on the bond is lower than the coupon rate?

	A.	The price of the bond will increase
	B.	The coupon rate of the bond will increase
	C.	The par value of the bond will decrease
	D.	The coupon payments will be adjusted to the new discount rate