Treasury notes and bonds. Use the information in the following table: Assume a $100,000 par value. What is the yield to maturity of the August 2005 Treasury bond with semiannual payment? Compare the yield to maturity and the current yield. How do you explain this relationship?

Today is February 15, 2008
Type	Issue Date	Price (per $100 par value)	Coupon Rate	Maturity Date	YTM	Current Yield	Rating
Bond	Aug 2005	85.15	5.00%	8-15-2015		5.872%	AAA

What is the yield to maturity of the August 2005 Treasury bond?

_____% (Round to three decimal places.)

Compare the yield to maturity and the current yield. How do you explain this relationship? (Select the best response.)

A. There is no certain relationship between the yield to maturity and the current yield.

B.If a bond sells at a discount, the yield to maturity is greater than the current yield.

C. If a bond sells at a premium, the yield to maturity is greater than the current yield.

D. If a bond sells for its par value, the yield to maturity is greater than the current yield.