Question

An 8 percent corporate bond that pays interest semi-annually was issued last year. Which two of the following most likely apply to this bond today if the current yield-tomaturity is 7 percent

I. a structure as an interest-only loanII. a current yield that equals the coupon rateIII. a yield-to-maturity equal to the coupon rateIV. a market price that differs from the face valueA. I and III onlyB. I and IV onlyC. II and III onlyD. II and IV onlyE. III and IV only

Answer 1

B. I and IV only

Step-by-step explanation:

A structure as an interest-only loan

A market price that differs from the face value

These two statements most likely apply to this bond today if the current yield-tomaturity is 7 percent.