One of the above is the most accurate statement? a. A bond is trading at a premium if its yield to maturity approaches its annual coupon. b. As interest rates rise, a 10-year coupon bond's relative price adjustment would be higher than that of a 10-year nil coupon bond. c. A coupon bond's present yield matches the yield to maturity whether it sells at par. d. Both a and c are true. e. None of the above claims are true.

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 3Q: The rate of return on a bond held to its maturity date is called the bonds yield to maturity. If...
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 One of the above is the most accurate statement?
a. A bond is trading at a premium if its yield to maturity approaches its annual coupon.
b. As interest rates rise, a 10-year coupon bond's relative price adjustment would be higher than that of a 10-year nil coupon bond.
c. A coupon bond's present yield matches the yield to maturity whether it sells at par.
d. Both a and c are true.
e. None of the above claims are true.

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