Which of the Following Statements Is CORRECT

question 65

Multiple Choice

Which of the following statements is CORRECT?

• A) A zero coupon bond's current yield is equal to its yield to maturity.
• B) If a bond's yield to maturity exceeds its coupon rate,the bond will sell at par.
• C) All else equal,if a bond's yield to maturity increases,its price will fall.
• D) If a bond's yield to maturity exceeds its coupon rate,the bond will sell at a premium over par.
• E) All else equal,if a bond's yield to maturity increases,its current yield will fall.

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Definitions:

Algorithmic

Pertaining to or using a set of rules to be followed in calculations or other problem-solving operations, especially by a computer.

Heuristic

A shortcut (rule of thumb or informal guideline) used to reduce the amount of thinking that is needed to make decisions.

Informal Reasoning

The process of thinking about issues in a non-formal or structured manner, often used in everyday problem-solving and decision-making.

Schemas

Cognitive frameworks or concepts that help individuals organize and interpret information from the world around them, influencing learning and perception.