Market price of bond increases the current yield

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Reference no: EM131998803

1. All else constant, as the market price of a bond increases the current yield _____ and the yield to maturity _____.

decreases; decreases

decreases; increases

increases; decreases

increases; increases

remains constant; increases

2. Your firm plans to build a hotel on a piece of land you own. You purchased the land three years ago for $3 million, and now the land is worth $4 million. What is the relevant cash flow at the beginning of this project related to the land?

a) -$1 million

b) -$3 million

c) -$4 million

d) -$7 million

Reference no: EM131998803

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