Posted by Anonymous on .
Which of the following statements is CORRECT? (Points : 10)
If a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.
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.
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.
If a coupon bond is selling at par, its current yield equals its yield to maturity.
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.