Which of the following statements is correct? Ni the anwers are correct Bond cash flows consist of periodic. usually annual interest (coupon) payments and the return of the principal when the bond is issued: To construct the yield curve, the U.S. Corporate bonds are ideal because they are all free of defaut riske Current yield is the annual coupon payment multiplied by the price of the bond which incorporates capital gains or losses. If you do not know the exact settlement and maturity dates for the bond, we could use the RATE function of Excel to find the yield to maturity assuming that the settiement a interest parment date for the bond. Question 6 Which of the following statements is correct? Macaulay Duration can be ealculated using the Duration function: Duration(Settiement, Maturity, Coupon. Va, Frequency, Basis) A 10-year bond will be considerably more sensitive to vield changes than the 20-vear bond. Maturity of a bond combines the effects of maturity, coupon rate, and yieid into a single number that we can use to measure the interest rate sensitivity of a bond Alt the answers are correct. The annual coupon payment is determined by dividing the face value (principali by the coupan rote