A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which of the following statement is correct?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 8MC: Suppose a 10-year, 10% semiannual coupon bond with a par value of 1,000 is currently selling for...
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A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par
value. Which of the following statement is correct?
Select one:
a. The bond's coupon rate is less than 10%.
b. Th
bond's coupon rate is equal to 10%.
c. If the yield to maturity increases, then the bond's price will increase.
d. The bond's current yield is less than 10%.
Transcribed Image Text:A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which of the following statement is correct? Select one: a. The bond's coupon rate is less than 10%. b. Th bond's coupon rate is equal to 10%. c. If the yield to maturity increases, then the bond's price will increase. d. The bond's current yield is less than 10%.
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