When the price of a bond equals the face value: a. The yield to maturity will be below the coupon rate b. The yield to maturity is greater than the current yield c. The yield to maturity will be above the coupon rate d. The current yield is equal to the coupon rate

When the price of a bond equals the face value: a. The yield to maturity will be below the coupon rate b. The yield to maturity is greater than the current yield c. The yield to maturity will be above the coupon rate d. The current yield is equal to the coupon rate

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Question

When the price of a bond equals the face value:

a. The yield to maturity will be below the coupon rate

b. The yield to maturity is greater than the current yield

c. The yield to maturity will be above the coupon rate

d. The current yield is equal to the coupon rate

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