Which of the Following Statements Is CORRECT

question 75

Multiple Choice

Which of the following statements is CORRECT?

• A) If a 10-year, $1,000 par, zero coupon bond were issued at a price that gave investors a 10% yield to maturity, and if interest rates then dropped to the point where rd = YTM = 5%, the bond would sell at a premium over its $1,000 par value.
• B) If a 10-year, $1,000 par, 10% coupon bond were issued at par, and if interest rates then dropped to the point where rd = YTM = 5%, we could be sure that the bond would sell at a premium above its $1,000 par value.
• C) Other things held constant, including the coupon rate, a corporation would rather issue noncallable bonds than callable bonds.
• D) Other things held constant, a callable bond would have a lower required rate of return than a noncallable bond because it would have a shorter expected life.
• E) Bonds are exposed to both reinvestment risk and price risk. Longer-term low-coupon bonds, relative to shorter-term high-coupon bonds, are generally more exposed to reinvestment risk than price risk.

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Definitions:

Social Movement Unionism

A form of unionism that combines traditional labor organizing with broader social and political issues, aiming to enact social change.

Industrial Relations

A field of study and practice focused on the management of employment relationships and the dynamics between employers, employees, and their representatives.

Industry Union

A type of labor union that represents all workers, skilled and unskilled, within a specific industry.

Job Control Unionism

A form of unionism focused on gaining control over work processes and conditions, emphasizing job security and workers' rights over wages.