Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A) If a 10-year, $1,000 par, zero coupon bond were issued at a price that gave investors a 10% yield to maturity, and if interest ratesThen dropped to the point where rd = YTM = 5%, the bond would sell at a premium over its $1,000 par value.
• B) If a 10-year, $1,000 par, 10% coupon bond were issued at par, and if interest rates then dropped to the point where rd = YTM = 5%, we could be sure that the bond would sell at a premium above its $1,000 par Value.
• C) Other things held constant, a corporation would rather issue noncallable bonds than callable bonds.
• D) Other things held constant, a callable bond would have a lower
• Required rate of return than a noncallable bond.
• E) Reinvestment rate risk is worse from an investor's standpoint than interest rate price risk if the investor has a short investment time horizon.

---

Definitions:

WordArt

A feature in Microsoft Word that allows users to create stylized text with various special effects, such as textures, outlines, and shapes.

Numerical Data

Information represented in numbers, often used in statistical, scientific, and mathematical analysis.

Chart

A visual representation of data designed to make complex information easily understandable at a glance.

Picture Style

A pre-defined set of adjustments or a filter applied to photos to achieve a specific look or effect, often used in photography and imaging software.