A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT?
A. If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
B. The bond's coupon rate is less than 8%.
C. If the yield to maturity increases, then the bond's price will increase.
D. If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.
E. The bond's current yield is less than 8%.
Answer: A
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