Which One of the Following Is Correct When Computing the Price

question 60

Multiple Choice

Which one of the following is correct when computing the price of a debt security when using a discount yield?

• A)The price will exceed the face value.
• B)An increase in the discount yield will increase the current price.
• C)The current price will decrease as the days to maturity decrease.
• D)The computation will be based on a 360-day year.
• E)The computation will consider leap years.

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Definitions:

Investing Activities

Part of the cash flow statement that shows the cash inflows and outflows related to transactions involving the purchase and sale of long-term assets and investments.

Total Current Liabilities

The sum of all liabilities of a company that are due within one fiscal year.

Statement Of Cash Flows

A financial document that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquid assets available for running its operations.