If a Bond Sells for a Premium, the Current Yield

question 13

True/False

If a bond sells for a premium, the current yield exceeds the yield to maturity.

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Definitions:

Measurement Error

The difference between the measured value of a quantity and its true value, often resulting from limitations in the measurement process.

Reliability

Reliability refers to the consistency of a measure or test to produce the same results under the same conditions over time.

Item Response Theory

An extension of classical test theory that allows for more detailed analyses of individual test items. Tools such as the item characteristic curve allow in-depth examination of an item’s discrimination and difficulty.

Classical Test Theory

Classical Test Theory is a framework used in psychological testing and assessment that evaluates the reliability and validity of test scores based on the analysis of test score properties.