Current Yield Overstates the Return of Premium Bonds Since Investors

question 86

True/False

Current yield overstates the return of premium bonds since investors who buy a bond at a premium face a capital loss over the life of the bond.

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Definitions:

Responsibility Centers

Divisions or units within an organization for which managers are accountable for certain activities or financial outcomes.

Management by Exception

A management strategy where only significant deviations from expected outcomes are addressed, focusing leaders' attention on the most important issues.

Responsibility Accounting

An accounting system that measures the results of each responsibility center and compares those results with some measure of expected or budgeted outcome.

Responsibility Reporting System

The preparation of reports for each level of responsibility in the company’s organization chart.