If the Coupon Rate and Yield to Maturity Are Both

question 362

Multiple Choice

If the coupon rate and yield to maturity are both 5%, then the bond must be:

• A) A zero-coupon bond.
• B) Selling at a discount.
• C) Selling at par.
• D) Maturing within one year.
• E) Selling above face value.

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Definitions:

Abilene Paradox

A situation where a group of people collectively decide on a course of action that is counter to the preferences of many or all of the individuals in the group because each member mistakenly believes their own preferences are counter to the group's.

Hot Desert

A biome characterized by high temperatures and very low precipitation, making it an extreme environment for plant and animal life.

Escalation Of Commitment

Refers to the phenomenon where individuals or organizations continue to invest time, money, or resources into a failing decision or project, due to the substantial investments already made, rather than abandon it.

Psychological Determinants

Factors of psychological origin that influence an individual's behaviors, attitudes, and perceptions.