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A Treasury Bond Has an 8% Annual Coupon and a 7.5

Question 18

Multiple Choice

A Treasury bond has an 8% annual coupon and a 7.5% yield to maturity.Which of the following statements is CORRECT?


A) The bond has a current yield greater than 8%.
B) The bond sells at a discount.
C) The bond's required rate of return is less than 7.5%.
D) If the yield to maturity remains constant, the price of the bond will decline over time.
E) The bond sells at a price below par.

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