Which of the Following Statements Is Correct

question 5

Multiple Choice

Which of the following statements is correct?

• A) If a company is retiring bonds for sinking fund purposes it will buy back bonds on the open market when the coupon rate is less than the market interest rate.
• B) A bond sinking fund would be good for investors if interest rates have declined after issuance and the investor's bonds get called.
• C) Mortgage bonds have less default risk than debentures.
• D) Both a and c are correct.
• E) All of the statements above are correct.

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Definitions:

Door-In-The-Face Technique

The Door-In-The-Face Technique is a persuasion strategy where a larger request is initially made and rejected, followed by a smaller, more reasonable request.

Unreasonable Request

A demand made that is not grounded in logic or fairness, often placing undue burden on others.

Door-In-The-Face Technique

A persuasion strategy where a large, unreasonable request is made first with the expectation it will be refused, followed by a smaller, more reasonable request.

Miniature Goat

A small breed of goat kept as a pet or for milk production, characterized by its significantly smaller size compared to standard goat breeds.