If a Bond Is Selling at a Discount, Which of the Following

question 115

Multiple Choice

If a bond is selling at a discount, which of the following statements is correct?

• A) The yield to maturity must be greater than the coupon rate.
• B) The coupon rate must be greater than the yield to maturity.
• C) The bond must have a low bond rating.
• D) All of these choices are correct.

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Definitions:

Cognitive Development

The study of how thinking, problem solving, and intelligence evolve as people age, primarily focusing on childhood developmental stages.

Mental Representations

The mental forms that a real object or event can take.

Objects

Material things that can be seen and touched, often regarded in contrast to concepts, ideas, or feelings that are intangible.

Three-year-olds

Three-year-olds are children at the age of three, a developmental stage where significant growth in language, motor skills, and social interaction is observed.