Which of the following statements is most correct?
A) If a bond's yield to maturity exceeds its annual coupon, then the bond will be trading at a premium.
B) If interest rates increase, the relative price change of a 10-year coupon bond will be greater than the relative price change of a 10-year zero coupon bond.
C) If a coupon bond is selling at par, its current yield equals its yield to maturity.
D) Both a and c are correct.
E) None of the answers above is correct.

Question

Quizplus · Accepted Answer

If a bond is selling at par, its current yield will be equal to its coupon rate. The yield to maturity will also be equal to the coupon rate, assuming the bond is held to maturity.

Which of the Following Statements Is Most Correct