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.

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Definitions:

Selling Price

The price at which a product or service is sold to customers, determining the revenue generated from sales activities.

Note Payable

A written promise to pay a specified sum of money, usually with interest, by a certain date.

Financing Activities

Transactions related to raising capital and paying back investors, including issuing equity and debt as well as dividend payments.

Cash Flow Statement

A report summarizing the total cash entering a company from operational activities and external investments, alongside the total cash spent on business operations and investments within a specific timeframe.