Which of the Following Statements Is CORRECT

question 65

Multiple Choice

Which of the following statements is CORRECT?

• A) If a bond's yield to maturity exceeds its coupon rate, the bond will sell at par.
• B) All else equal, if a bond's yield to maturity increases, its price will fall.
• C) If a bond's yield to maturity exceeds its coupon rate, the bond will sell at a premium over par.
• D) All else equal, if a bond's yield to maturity increases, its current yield will fall.
• E) A zero coupon bond's current yield is equal to its yield to maturity.

---

Definitions:

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell.

Demand To Supply

This term reflects the relationship and balance between consumer demand for goods and services and the supply provided by producers.

Decrease In Supply

A reduction in the total amount of a good or service that is available to consumers, often leading to higher prices.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product demanded, leading to a balance in the market.