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:

Treasurer

A Treasurer is a financial officer responsible for overseeing the management and reporting of an organization's finances, ensuring proper handling of cash flow, investments, and financial planning.

Financial Manager

A professional responsible for managing an organization’s financial health by planning and directing investment activities, developing financial strategies, and managing risks.

Long-Term Sources

Financing options available to a business that have a repayment period of more than one year, such as bonds or long-term loans.

Marketable Securities

Financial instruments that are easily convertible into cash, typically with high liquidity and short maturity periods, such as stocks and bonds.