Which of the Following Statements Is Most Correct

question 82

Multiple Choice

Which of the following statements is most correct?

• A)If a bond's yield to maturity exceeds its coupon rate, the bond's current yield must also exceed its coupon rate.
• B)If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• C)If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rate.
• D)Answers b and c are both correct.
• E)None of the above answers are correct.

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Definitions:

Restrictive Covenant

A clause in a contract that limits certain actions or uses of property to protect business interests or preserve property value.

Public Policy

Principles and actions adopted or proposed by a government to address societal issues and achieve beneficial outcomes.

Minimum Price

The lowest price at which a product or service can be sold, often regulated by law or agreement.

Loss Leader

A pricing strategy where a product is sold at a loss to attract customers, hoping they will make additional purchases at profitable prices.