Which of the Following Statements Best Describes Bonds

question 109

Multiple Choice

Which of the following statements best describes bonds?

• A) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• B) If rates fall after its issue, a zero coupon bond could trade at a price above its par value.
• C) If rates fall rapidly, a zero coupon bond's expected appreciation could become negative.
• D) If a firm moves from a position of strength toward financial distress, its bonds' yield to maturity would probably decline.

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Definitions:

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others, and understand that others have beliefs and perspectives different from one's own.

Mental States

Conditions of mind or consciousness, including thoughts, feelings, perceptions, moods, and emotional states.

Different Sense

The ability to interpret and distinguish diverse types of sensory information, such as visual, auditory, and tactile stimuli.

Impulsive

Impulsive pertains to actions or behaviors initiated without forethought or consideration of the consequences.