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:

Otolith Organs

Structures within the inner ear that are involved in detecting linear accelerations and head tilts, thereby contributing to the sense of balance and spatial orientation.

Crystals

are solid materials whose atoms, ions, or molecules are arranged in a highly ordered microscopic structure, forming a crystal lattice that extends in all directions.

Gestalt Principle

A theory in psychology that proposes the human brain sees objects as whole forms rather than as a collection of parts, emphasizing the context and patterns of perception.

Columns

Structural elements in architecture that serve as support; also refers to vertical arrangements of information or data in tables or spreadsheets.