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Which of the following statements is CORRECT? a. A bond's current yield must always be either equal to its yield to maturity or between its
Which of the following statements is CORRECT?
a. | A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate. | |
b. | If a bond sells for less than par, then its yield to maturity is less than its coupon rate. | |
c. | Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par. The premium bond must have a lower current yield and a higher capital gains yield than the par bond. | |
d. | If a bond sells at par, then its current yield will be less than its yield to maturity. | |
e. | A discount bond's price declines each year until it matures, when its value equals its par value. |
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