Which of the following statements is CORRECT?
A) If a bond is selling at a discount to par,its current yield will be greater than its yield to maturity.
B) All else equal,bonds with longer maturities have less price risk than bonds with shorter maturities.
C) If a bond is selling at its par value,its current yield equals its capital gains yield.
D) If a bond is selling at a premium,its current yield will be less than its capital gains yield.
E) All else equal,bonds with larger coupons have less price risk than bonds with smaller coupons.

Question

Quizplus · Accepted Answer

E) All else equal, bonds with larger coupons have less price risk than bonds with smaller coupons. This is because the larger coupon payments provide a higher cash flow during the bond's life, which can help mitigate the impact of interest rate changes on the bond's price.

Which of the Following Statements Is CORRECT