Which of the Following Statements Is CORRECT

Which of the following statements is CORRECT?

A) on an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
B) on an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest.
C) if a coupon bond is selling at par, its current yield equals its yield to maturity.
D) the current yield on bond a exceeds the current yield on bond b; therefore, bond a must have a higher yield to maturity than bond b.
E) if a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.

Correct Answer:

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