A 15-year bond with an 8% annual coupon has a yield to maturity of 9%. Which of the following statements is correct? If the yield to maturity remains constant, the bond's price one year from now will be lower than its current price. O The bond's price at maturity will be below par. The bond's current yield is greater than 8%. The bond is selling at a premium. The bond is selling at par.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A 15-year bond with an 8% annual coupon has a yield to maturity of 9%. Which of the
following statements is correct?
If the yield to maturity remains constant, the bond's price one year from now will be lower than its
current price.
The bond's price at maturity will be below par.
The bond's current yield is greater than 8%.
O The bond is selling at a premium.
The bond is selling at par.
Transcribed Image Text:A 15-year bond with an 8% annual coupon has a yield to maturity of 9%. Which of the following statements is correct? If the yield to maturity remains constant, the bond's price one year from now will be lower than its current price. The bond's price at maturity will be below par. The bond's current yield is greater than 8%. O The bond is selling at a premium. The bond is selling at par.
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