Which of the Following Statements Is CORRECT

question 31

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• B) If rates fall after its issue, a zero coupon bond could trade at a
• Price above its par value.
• C) If rates fall rapidly, a zero coupon bond's expected appreciation
• Could become negative.
• D) If a firm moves from a position of strength toward financial
• Distress, its bonds' yield to maturity would probably decline.
• E) If a bond is selling at a premium, this implies that its yield to
• Maturity exceeds its coupon rate.

---

Definitions:

International Accounting Standards Board

An independent, private-sector body that develops and approves International Financial Reporting Standards (IFRS), ensuring transparency, accountability, and efficiency in the global financial markets.

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.