Which of the Following Statements Is Most Correct

question 13

Multiple Choice

Which of the following statements is most correct?

• A) All else equal, a bond that has a coupon rate of 10 percent will sell at a discount if the required return for a bond of similar risk is 8 percent.
• B) Debentures generally have a higher yield to maturity relative to mortgage bonds.
• C) If there are two bonds with equal maturity and credit risk, the bond which is callable will have a higher yield to maturity than the bond which is noncallable.
• D) Answers a and c are correct.
• E) Answers b and c are correct.

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Definitions:

Duty of Care

Duty of care is a legal obligation imposed on individuals to exercise a reasonable standard of care while performing any acts that could foreseeably harm others.

Negligence Action

A legal suit filed by an individual claiming harm due to another party's failure to exercise an appropriate level of care.

Forfeiture Rule

The principle that a criminal should not be permitted to profit from a crime.

Criminal's Estate

The assets and properties owned by a criminal, which may be subject to legal action or forfeiture in the event of legal proceedings against the individual.