Which of the Following Statements Is Most Accurate

question 8

Multiple Choice

Which of the following statements is most accurate?

• A) Yield to maturity is equal to the coupon rate if the bond is held to maturity.
• B) Yield to maturity is the same as the coupon rate.
• C) Yield to maturity will exceed the coupon rate if the bond is purchased for face value.
• D) Yield to maturity is the same as the coupon rate if the bond is purchased for face value and held to maturity.

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Definitions:

CCA Depreciation

Capital Cost Allowance, a system in Canada that determines how a business can claim depreciation on tangible capital assets for tax purposes.

FIFO

"First In, First Out," an accounting method for valuing inventory where the oldest items are sold first.

Straight-Line

A method of calculating depreciation of an asset which assumes the asset will lose an equal amount of value each year.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed, and thus should not affect future business decisions.