Which of the following statements is incorrect?

A.

If the yield to maturity (YTM) of a bond is lower than its coupon rate, the

bond is selling at a premium.

B.

All else equal, bonds with higher liquidity have higher yields than those with

lower liquidity.

C.

The yield to maturity (YTM) is the discount rate at which the present value of

the bond equals the market price of the bond.

D.

All else equal, US Government bonds have lower yields than Baa/BBB rated

corporate bonds since US Government bonds do not contain the default risk

premium.

E. None of the above statements are incorrect. (All of the above statements

are correct.)