Which of the Following Statements Is CORRECT

question 85

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at par,its current yield equals its yield to maturity.
• B) If a coupon bond is selling at a discount,its price will continue to decline until it reaches its par value at maturity.
• C) If interest rates increase,the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.
• D) If a bond's yield to maturity exceeds its annual coupon,then the bond will trade at a premium.
• E) If a coupon bond is selling at a premium,its current yield equals its yield to maturity.

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Definitions:

Business Investments

The allocation of resources by businesses into projects or assets with the expectation of generating future profits.

Loanable Funds

This is the money available for borrowing in the financial markets, influenced by interest rates.

Technological Breakthroughs

Significant progression or development in technology that creates a new foundation for further advancements and innovation.

Investment Projects

Initiatives or plans undertaken to allocate resources, expecting to generate returns or benefits over time.