Which of the Following Statements Is CORRECT

question 57

Multiple Choice

Which of the following statements is CORRECT?

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

Interpret the information contained in the cash flow statement to assess the financial health of a company.

Understand the impact of treasury stock transactions on the cash flow statement.

Analyze changes in balance sheet accounts to determine cash flows from operating, investing, and financing activities.

Calculate cash paid for interest and understand its reporting on the cash flow statement.