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The term structure of interest rates is negatively slopped. Which of the following choices correctly orders the YTM on three bonds that are identical in every way except their coupon rate? Each bond matures in 20 years. Which statement is correct?
Bond 5% coupon bond YTM > Bond 10% coupon bond YTM > Bond 0% coupon bond YTM
Bond 0% coupon bond YTM = Bond 5% coupon bond YTM = Bond 10% coupon bond YTM
Bond 10% coupon bond YTM > Bond 5% coupon bond YTM > Bond 0% coupon bond YTM
Bond 0% coupon bond YTM > Bond 5% coupon bond YTM > Bond 10% coupon bond YTM
Bond 5% coupon bond YTM > Bond 0% coupon bond YTM > Bond 10% coupon bond YTM
Bond 10% coupon bond YTM > Bond 0% coupon bond YTM > Bond 5% coupon bond YTM
Bond 0% coupon bond YTM > Bond 10% coupon bond YTM > Bond 5% coupon bond YTM
