Which of the Following Statements Is CORRECT

question 50

Multiple Choice

Which of the following statements is CORRECT?

• A) The total yield on a bond is derived from dividends plus changes in the price of the bond.
• B) Bonds are riskier than common stocks and therefore have higher required returns.
• C) Bonds issued by larger companies always have lower yields to maturity (less risk) than bonds issued by smaller companies.
• D) The market value of a bond will always approach its par value as its maturity date approaches, provided the bond's required return remains constant.
• E) If the Federal Reserve unexpectedly announces that it expects inflation to increase, then we would probably observe an immediate increase in bond prices.

---

Definitions:

Professional Networks

Online platforms or offline groups that connect individuals within the same industry or profession for networking, opportunities, and knowledge exchange.

Social Networking

The use of internet-based applications and websites to build social relations with others who share similar interests or activities.

Professional Messaging Guidelines

A set of rules or suggestions designed to enhance effective and appropriate communication in a professional context.

Abbreviations

Shortened forms of words or phrases used to simplify communication, often consisting of the initial letters of a series of words.