Which of the following statements is CORRECT?
A. If a coupon bond is selling at par, its current yield equals its yield to maturity.
B. If rates fall after its issue, a zero coupon bond could trade at a price above its maturity (or par) value.
C. If rates fall rapidly, a zero coupon bond's expected appreciation could become negative.
D. If a firm moves from a position of strength toward financial distress, its bonds' yield to maturity would probably decline.
E. If a bond is selling at a premium, this implies that its yield to maturity exceeds its coupon rate.
Answer: A
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