Please explain with details also explain wrong options A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? a. The bond’s required rate of return is less than 7.5%. b. The bond has a current yield greater than 8%. c. The bond sells at a price below par. d. If the yield to maturity remains constant, the price of the bond will decline over time e. The bond sells at a discount
Please explain with details also explain wrong options A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT? a. The bond’s required rate of return is less than 7.5%. b. The bond has a current yield greater than 8%. c. The bond sells at a price below par. d. If the yield to maturity remains constant, the price of the bond will decline over time e. The bond sells at a discount
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
Section: Chapter Questions
Problem 1PS
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H3. Please explain with details also explain wrong options
A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity. Which of the following statements is CORRECT?
| a. | The bond’s required |
| b. The bond has a current yield greater than 8%. | |
| c. The bond sells at a price below par. | |
| d. If the yield to maturity remains constant, the price of the bond will decline over time |
|
| e. The bond sells at a discount |
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