Which of the Following Statements Is Correct

Question 55
Multiple Choice

Which of the following statements is CORRECT? A) If a coupon bond is selling at par,its current yield equals its yield to maturity. B) If rates fall after its issue,a zero coupon bond could trade at a price above its maturity (or par)value. C) If rates fall rapidly,a zero coupon bond's expected appreciation could become negative. D) If a firm moves from a position of strength toward financial distress,its bonds' yield to maturity would probably decline. E) If a bond is selling at a premium,this implies that its yield to maturity exceeds its coupon rate.