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Which one of the following relationships is stated correctly? Multiple Choice The capital gains yield is equal to zero for a zero coupon bond. Increasing the coupon rate decreases the current yield, all else constant. Decreasing the time to maturity increases the price of a discount bond, all else constant. The coupon rate exceeds the current yield when a bond sells at a discount.

Respuesta :

Answer:

Decreasing the time to maturity increases the price of a discount bond, all else constant.

Explanation:

A discount bond is a bond that is issued for less than its par or face value. Discount bonds may also be a bond currently trading for less than its face value in the secondary market.

Yield to maturity considers the bond's current market price, par value, coupon interest rate, and time to maturity to calculate a bond's return.

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