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:

Marginal Utility

The extra pleasure a customer receives from using an additional unit of a product or service.

Donuts

A type of fried dough confection or dessert food, commonly shaped in a ring or filled, known for its sweet taste and various toppings.

Day

A period of 24 hours as a unit of time, representing the time it takes for the Earth to complete one rotation around its axis.

Indeterminate

A situation or outcome that cannot be predicted, decided, or clearly defined.