Which of the Following Statements Is Most Correct

question 83

Multiple Choice

Which of the following statements is most correct?

• A) If a bond's yield to maturity exceeds its coupon rate, the bond's current yield must also exceed its coupon rate.
• B) If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• C) If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rate.
• D) Answers b and c are correct.
• E) None of the answers above is correct.

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Equilibrium

Equilibrium in economics is the point where supply equals demand for a product, resulting in stable prices and volume of sales.

Efficient Portfolio

Provide the highest expected return for any degree of risk. The efficient portfolio is that which provides the lowest degree of risk for any expected return.

Expected Return

Expected Return is the anticipated profit or loss a portfolio generates over a specific period, based on historical or forecasted performance.