A 10-Year Corporate Bond Has an Annual Coupon of 9

question 16

Multiple Choice

A 10-year corporate bond has an annual coupon of 9%.The bond is currently selling at par ($1,000) .Which of the following statements is CORRECT?

• A) The bond's expected capital gains yield is zero.
• B) The bond's yield to maturity is above 9%.
• C) The bond's current yield is above 9%.
• D) If the bond's yield to maturity declines,the bond will sell at a discount.
• E) The bond's current yield is less than its expected capital gains yield.

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Definitions:

Actual Price

The real or final price at which a transaction is completed, as opposed to an estimated or listed price.

Labor Rate Variance

The difference between the actual labor costs incurred and the expected (or standard) labor costs based on predetermined rates.

Labor Standards

The established benchmarks or expectations for the amount of time and effort required to perform a job or task efficiently.

Operations

The day-to-day activities involved in running a business, especially those related to production, manufacturing, or providing services.