If a bond is selling for less than par value, what can be concluded about its current yield?

When a bond is selling for less than par value, it is often referred to as being sold at a discount. This situation implies that the market interest rates have risen since the bond was originally issued, making the bond's fixed coupon payments less attractive compared to new issues that offer higher rates.

The current yield of a bond is calculated by taking the bond's annual interest payment and dividing it by its current market price. Since the bond is being sold at a lower price (discount), the calculation results in a higher current yield. This is due to the fixed coupon payments remaining the same while the price at which investors can purchase the bond is reduced, thus enhancing the yield that investors receive relative to their investment.

Therefore, one can conclude that if a bond is selling for less than par value, the current yield is indeed higher than the nominal yield, which is the yield based on the bond's face value. This relationship highlights the bond's response to prevailing market interest rate conditions, making option C the accurate conclusion.