You Own a Fixed-Rate Bond That Has a Coupon Rate

Multiple Choice

You own a fixed-rate bond that has a coupon rate of 6.5 percent and matures in 12 years.You purchased this bond at par value when it was originally issued.If the current market rate for this type and quality of bond is 6.8 percent,then you would expect:

A) the bond issuer to increase the amount of each interest payment.
B) the yield to maturity to remain constant due to the fixed coupon rate.
C) the current yield today to be less than 6.5 percent.
D) today's market price to exceed the face value of the bond.
E) to realize a capital loss if you sold the bond at the market price today.