If a Bond Sells at a Discount and Has a Yield

question 11

Multiple Choice

If a bond sells at a discount and has a yield to maturity of 9%, the current yield must be:

• A)equal to the coupon rate.
• B)less than the coupon rate.
• C)greater than the coupon rate.
• D)equal to the yield to maturity.

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Definitions:

Financial Condition

Financial condition is a broad term that describes the current fiscal health and stability of an individual or entity, considering factors like assets, liabilities, income, and expenses.

Snapshot

A visual or data representation capturing the state or conditions of a system at a particular moment in time.

Asset Turnover Ratio

A financial ratio that measures the efficiency of a company's use of its assets to generate sales or revenue.

Industry Average

A benchmark or average measurement of performance or financial metrics within a particular industry sector.