Which of the Following Statements Is CORRECT

question 17

Multiple Choice

Which of the following statements is CORRECT?

• A)If a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.
• B)On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
• C)On an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest.
• D)If a coupon bond is selling at par, its current yield equals its yield to maturity.
• E)The current yield on Bond A exceeds the current yield on Bond B; therefore, Bond A must have a higher yield to maturity than Bond B.

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Definitions:

Partnership Term

The duration for which a partnership agreement is set to exist, which can be indefinite or fixed, as specified in the partnership agreement.

Partnership Obligations

The duties and responsibilities that partners within a business partnership must fulfill, which may include contributing capital, sharing in profits and losses, and acting in the partnership’s best interest.

Assumed Liability

Liability that a party takes on voluntarily from another party, often seen in business acquisitions where the buyer takes on liabilities of the seller.

Creditors

Individuals or entities to whom money is owed by a debtor.