Which of the Following Statements Is Most Correct

question 31

Multiple Choice

Which of the following statements is most correct?

• A) All else equal, if a bond's yield to maturity increases, its price will fall.
• B) All else equal, if a bond's yield to maturity increases, its current yield will fall.
• C) If a bond's yield to maturity exceeds the coupon rate, the bond will sell at a premium over par.
• D) All of the answers above are correct.
• E) None of the answers above is correct.

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Definitions:

Original Buyer

The first individual or entity that purchases a product or service directly from the seller or manufacturer.

Benefit of the Bargain

A principle in contract law that allows a party harmed by a breach to recover the value of what they were promised in the contract.

Rescind

To cancel a contract.

Seller

An individual or entity that offers goods or services for sale to consumers or other businesses.