Question

Which one of the following statements is true?A) The current yield on a par value bond will exceed the bond's yield to maturityB) The yield to maturity on a premium bond exceeds the bond's coupon rateC) The current yield on a premium bond is equal to to the bond's coupon rateD) A premium bond has a current yield that exceeds the bond's coupon rateE) A discount bond has a coupon rate that is less than the bond's yield to maturity

Answer 1

E) A discount bond has a coupon rate that is less than the bond's yield to maturity

Step-by-step explanation:

A discount bond has a coupon rate that is below the bond's YTM this means that the bonds coupons or payments are lower than the Interest rate.