A Bond Has a Current Yield That Is Equal to the Yield

question 103

Multiple Choice

A bond has a current yield that is equal to the yield to maturity. Given this, which one of the following must also be true?

• A)The bond must pay annual interest.
• B)The maturity value must be greater than the bond price.
• C)The bond can have any maturity date.
• D)The coupon rate must exceed the current yield.
• E)The price must exceed the par value.

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Definitions:

Fixed Costs

Costs that do not vary with the level of output, such as rent, salaries, and insurance premiums.

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Baked desserts typically made from ingredients like flour, sugar, and eggs.

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The output per unit of input, calculated by dividing total product by the number of units of input, used to measure productivity.

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A construction company is a business entity that deals with the building, remodeling, maintenance, and demolition of structures, such as homes, offices, and other buildings, employing a range of skilled and unskilled laborers.