Which of the Following Statements Is CORRECT

question 76

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 riskier than common stocks and therefore have higher
• Required returns.
• D) Bonds issued by larger companies always have lower yields to
• Maturity (less risk) than bonds issued by smaller companies.
• E) The market value of a bond will always approach its par value as its maturity date approaches, provided the bond's required return remains constant.

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Definitions:

Economic Power

The capacity of an entity, whether a nation, corporation, or individual, to influence or control economic activities and outcomes.

CEO Compensation

The total remuneration package, including salary, bonuses, and stock options, offered to the chief executive officer of a corporation.

Employee Compensation

Refers to the total amount of pay and benefits, including salary, wages, bonuses, and benefits, that an employee receives from their employer.

Supermarkets

Retail stores that offer a wide variety of goods, including food, household items, and often pharmaceuticals, under one roof.