Which of the Following Statements Is Most Correct

question 110

Multiple Choice

Which of the following statements is most correct?

• A) If a bond is selling for a premium, this implies that the bond's yield to maturity exceeds its coupon rate.
• B) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• C) If rates fall after its issue, a zero coupon bond could trade for an amount above its par value.
• D) Statements b and c are correct.
• E) None of the statements above is correct.

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Definitions:

Linear Regression

A statistical technique employed to analyze the relationship between a dependent variable and one or more independent variables.

Regression Equation

A mathematical formula used to predict the value of a dependent variable based on one or more independent variables.

Predicted Value

The value estimated using a model or equation based on independent variables, in the context of regression analysis.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effects on the dependent variable.