Which One of the Following Statements Is True About a $1,000

question 106

Multiple Choice

Which one of the following statements is true about a $1,000, 5% annual coupon bond that is selling for $975?

• A) The current yield is more than 5%.
• B) The current yield is 5%.
• C) The current yield is less than 5%.
• D) The yield-to-maturity is less than 5%.

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Definitions:

Legal Authority

The formal and legitimate power or right given to an entity or individual to make decisions, enact laws, or enforce rules and regulations.

United Nations

An international organization formed in 1945 to increase political and economic cooperation among its member countries.

Power Distance

A cultural dimension that reflects the degree to which less powerful members of a society accept and expect power to be distributed unequally.

Short-Termism

The focus on immediate gains or results at the expense of long-term strategy, sustainability, or investment. Often criticized in business and investment contexts.