Which of the Following Statements Is CORRECT

question 79

Multiple Choice

Which of the following statements is CORRECT?

• A) Assume that two bonds have equal maturities and are of equal risk,but one bond sells at par while the other sells at a premium above par.The premium bond must have a lower current yield and a higher capital gains yield than the par bond.
• B) A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate.
• C) If a bond sells at par,then its current yield will be less than its yield to maturity.
• D) If a bond sells for less than par,then its yield to maturity is less than its coupon rate.
• E) A discount bond's price declines each year until it matures,when its value equals its par value.

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Definitions:

Colonial Cause

The motivations and reasons behind the colonization efforts, including economic gain, expansion of territory, and spreading of culture or religion.

Olive Branch Petition

A final attempt by the colonists to avoid a war of independence against Britain, symbolizing peace and reconciliation.

King George III

The King of Great Britain and Ireland during the latter half of the 18th century, known for his reign during the American Revolutionary War and the subsequent loss of the American colonies.

No Hope

Generally signifies a situation or mindset where there is a belief that no positive outcomes are possible.