Which of the Following Statements Is CORRECT

question 75

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at a discount, then the bond's expected capital gains yield is negative.
• B) If a bond is selling at a discount, the yield to call is a better measure of the expected return than the yield to maturity.
• C) The current yield on Bond A exceeds the current yield on Bond B.Therefore, Bond A must have a higher yield to maturity than Bond B.
• D) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• E) If a coupon bond is selling at a premium, then the bond's current yield is zero.

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Definitions:

Analysts' Expectations

Analysts' expectations are forecasts or projections made by financial analysts about a company's future earnings, revenue, or performance.

Conflicts of Interest

Situations where an individual's or entity's vested interests may potentially interfere with their ability to make impartial decisions, often leading to ethical dilemmas in various professions and fields.

Business Relationships

The interactions and engagements between a business and its stakeholders, including customers, suppliers, employees, and partners.

Accounting Loopholes

Specific provisions or gaps in financial regulation that can be legally exploited to avoid or reduce tax liabilities.