Which of the Following Statements Is CORRECT

question 39

Multiple Choice

Which of the following statements is CORRECT?

• A) The market value of a bond will always approach its par value as its maturity date approaches.This holds true even if the firm has filed for bankruptcy.
• B) Rising inflation makes the actual yield to maturity on a bond greater than a quoted yield to maturity that is based on market prices.
• C) The yield to maturity on a coupon bond that sells at its par value consists entirely of a current interest yield; it has a zero expected capital gains yield.
• D) On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
• E) The yield to maturity for a coupon bond that sells at a premium consists entirely of a positive capital gains yield; it has a zero current interest yield.

---

Definitions:

Impact Craters

Depressions on the surface of a planet or moon created by the collision with another celestial body.

Tectonic Activity

The movement and interaction of Earth's lithospheric plates, which can cause earthquakes, volcanic eruptions, and the formation of mountains.

Volcanic Activity

The process of magma rising to the Earth's surface, which can lead to eruptions, forming volcanoes and lava flows.

Impact Craters

Circular depressions on the surface of planets or moons formed by the collision with a meteorite, asteroid, or comet.