Which of the Following Statements Is NOT CORRECT

question 77

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) All else equal, bonds with longer maturities have more interest rate (price) risk than bonds with shorter maturities.
• B) If a bond is selling at its par value, its current yield equals its yield to maturity.
• C) If a bond is selling at a premium, its current yield will be greater than its yield to maturity.
• D) All else equal, bonds with larger coupons have greater interest rate (price) risk than bonds with smaller coupons.
• E) If a bond is selling at a discount to par, its current yield will be less than its yield to maturity.

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Definitions:

Vertical Keiretsu

Vertical keiretsu refers to a type of business arrangement in Japan where a group of companies, primarily suppliers, are linked through cross-shareholdings and share a major manufacturer or assembler at the top.

Supplier Firms

Companies that provide goods or services to other businesses or customers within a supply chain.

Distributor Firms

Distributor firms are companies specialized in distributing products from manufacturers to retailers or directly to consumers.

Mass Production

The manufacture of large quantities of standardized products, often using assembly lines or automated technology.