Which of the Following Statements Is CORRECT

question 68

Multiple Choice

Which of the following statements is CORRECT?

• A) Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par. The premium bond must have a lower current yield and a higher
• Capital gains yield than the par bond.
• B) A bond's current yield must always be either equal to its yield to
• Maturity or between its yield to maturity and its coupon rate.
• C) If a bond sells at par, then its current yield will be less than
• Its yield to maturity.
• D) If a bond sells for less than par, then its yield to maturity is
• Less than its coupon rate.
• E) A discount bond's price declines each year until it matures, when its value equals its par value.

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used as benchmarks against actual production costs.

Gallons

A unit of volume measurement used primarily in the United States, equivalent to 3.785 liters.

Raw Materials Inventory

The total cost of all the raw materials that are currently held by a company in stock, awaiting to be used in production.

Gallons

A unit of volume used primarily in the United States for measuring liquids.