A 10-year corporate bond has an annual coupon of 9%. The bond is currently selling at par ($1,000). Which of the following statements is CORRECT?
A. The bond's expected capital gains yield is zero.
B. The bond's yield to maturity is above 9%.
C. The bond's current yield is above 9%.
D. If the bond's yield to maturity declines, the bond will sell at a discount.
E. The bond's current yield is less than its expected capital gains yield.
Answer: A
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