Problem: Which of the following statements is the most correct and why?
1) If a bond sells for less than par, then its yield to maturity is less than its coupon rate.
2) If a bonds sell at par, then its current yield will be less than yield to maturity.
3) Assuming that both are held to maturity and are equal risk, a bond selling for more than par with ten yrs to maturity will have a lower current yield and higher capital gain relative to bond that sells at par.
4) Anwers are A and C
5) None of the anwers above