Which of the Following Statements Is CORRECT

question 66

Multiple Choice

Which of the following statements is CORRECT?

• A) The yield to maturity for a coupon bond that sells at a premium consists entirely of a positive capital gains yield;it has a zero current interest yield.
• B) The market value of a bond will always approach its par value as its maturity date approaches.This holds true even if the firm has filed for bankruptcy.
• C) Rising inflation makes the actual yield to maturity on a bond greater than a quoted yield to maturity that is based on market prices.
• D) The yield to maturity on a coupon bond that sells at its par value consists entirely of a current interest yield;it has a zero expected capital gains yield.
• E) The expected capital gains yield on a bond will always be zero or positive because no investor would purchase a bond with an expected capital loss.

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Definitions:

Psychoactive Drugs

Substances that affect the mind, altering mood, perception, or brain function.

Perception

The process by which individuals organize and interpret sensory information to form a meaningful picture of the world.

Central Nervous System

The complex of nerve tissues that controls the activities of the body. In vertebrates, it comprises the brain and the spinal cord.

Stimulant

A type of drug that increases activity in the central nervous system, causing increased alertness, attention, and energy.