Which of the Following Statements Is CORRECT

question 85

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at par,its current yield equals its yield to maturity.
• B) If a coupon bond is selling at a discount,its price will continue to decline until it reaches its par value at maturity.
• C) If interest rates increase,the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.
• D) If a bond's yield to maturity exceeds its annual coupon,then the bond will trade at a premium.
• E) If a coupon bond is selling at a premium,its current yield equals its yield to maturity.

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Definitions:

Exculpatory Clause

A statement in a contract that frees one party (usually the drafter of the agreement) from all liability arising out of performance of the contract, generally based on factors such as consumer ignorance or a great deal of unexplained fine print that serve to deprive the less powerful party of a meaningful choice.

Age of Majority

The legal age at which an individual is considered capable of entering into contracts and other legal bindings, marking the transition into legal adulthood.

Necessity

A concept in law and ethics that allows for actions under exceptional circumstances, typically for immediate need or survival.

Restitution

The act of compensating for loss, damage, or injury caused, typically in legal contexts.