Which of the Following Statements Is CORRECT

question 75

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at a discount, then the bond's expected capital gains yield is negative.
• B) If a bond is selling at a discount, the yield to call is a better measure of the expected return than the yield to maturity.
• C) The current yield on Bond A exceeds the current yield on Bond B.Therefore, Bond A must have a higher yield to maturity than Bond B.
• D) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• E) If a coupon bond is selling at a premium, then the bond's current yield is zero.

---

Definitions:

FUTA Tax Liability

Federal Unemployment Tax Act liability, which denotes the tax employers must pay to fund the federal government's unemployment benefits.

Earnings

The amount of profit that a company produces during a specific period, which is calculated as revenues minus expenses.

Advance Premium

An advance premium refers to payments made by policyholders to insurers, covering future periods of insurance coverage.

Workers' Compensation

Insurance offering medical benefits and compensation for lost wages to employees who get injured while working.