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You currently own a bond you purchased at par when it was issued ten years ago. The bond has a 7 percent annual coupon and
You currently own a bond you purchased at par when it was issued ten years ago. The bond has a 7 percent annual coupon and matures 5 years from now. Which one of the following statements applies to this bond if the relevant market interest rate is now 4.8 percent?
The current yield-to-maturity is greater than 7 percent. | ||
The current yield is 7 percent. | ||
The next interest payment will be $35. | ||
The bond is currently valued at one-half of its issue price. | ||
You will realize a capital gain on the bond if you sell it today. |
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