Which of the following statements is CORRECT?
A) on an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
B) on an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest.
C) if a coupon bond is selling at par, its current yield equals its yield to maturity.
D) the current yield on bond a exceeds the current yield on bond b; therefore, bond a must have a higher yield to maturity than bond b.
E) if a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.

Question

Quizplus · Accepted Answer

When a coupon bond is selling at par, its coupon rate equals its yield to maturity, which in turn equals its current yield.

Which of the Following Statements Is CORRECT