Final answer:
The true statement about a $1,000, 6% annual coupon bond selling for $1,012 is that its current yield is less than 6%, because the coupon payment divided by the market price results in a yield of 5.93%. So the correct answer is option 1.
Step-by-step explanation:
When analyzing the statement about a $1,000, 6% annual coupon bond that is selling for $1,012, you have to look at the current yield and yield-to-maturity (YTM). The current yield is calculated by taking the annual coupon payment and dividing it by the market price of the bond.
Here, the annual coupon payment is 6% of $1,000, which is $60. So, the current yield is $60 / $1,012 = 5.93%, which is less than 6%. This implies that statement 1) The current yield is less than 6% is true. Regarding the yield-to-maturity, since the bond is selling for more than the face value and assuming that the bond will be redeemed at its face value.
(Ignoring the time value of money for this basic explanation), the YTM would be slightly less than the coupon rate, making statements 3) and 4) false, as the YTM would not be greater than 6% nor exactly 6%. Statement 2) is also false since we have already established that the current yield is indeed less than 6%.