Which of the Following Statements Is CORRECT

question 57

Multiple Choice

Which of the following statements is CORRECT?

• A) If the Federal Reserve unexpectedly announces that it expects inflation to increase,then we would probably observe an immediate increase in bond prices.
• B) The total yield on a bond is derived from dividends plus changes in the price of the bond.
• C) Bonds are generally regarded as being riskier than common stocks,and therefore bonds have higher required returns.
• D) Bonds issued by larger companies always have lower yields to maturity (due to less risk)than bonds issued by smaller companies.
• E) The market price of a bond will always approach its par value as its maturity date approaches,provided the bond's required return remains constant.

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Definitions:

Consumer Product Safety Commission

A U.S. federal agency responsible for the regulation and oversight of consumer product safety standards.

Falsified Safety Reports

Incorrect or misleading safety documentation, often created to meet regulatory compliance falsely or hide deficiencies.

Utilitarianism

A philosophical theory that suggests that actions are right if they are useful or for the benefit of a majority, emphasizing the greatest happiness principle.

Personal Moral Philosophy

An individual's set of beliefs, principles, and values regarding what is right and wrong, guiding their behavior and decision-making.