Which of the Following Statements Is MOST Correct

question 18

Multiple Choice

Which of the following statements is MOST correct?

• A) If a bond's yield to maturity exceeds its coupon rate, the bond's current yield (interest yield) must also exceed its coupon rate.
• B) If a bond's yield to maturity exceeds its coupon rate, the bond's price must be less than its maturity value.
• C) If two bonds have the same maturity, the same yield to maturity, and the same level of risk, the bonds should sell for the same price regardless of the bond's coupon rate.
• D) Answers B and C are correct.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Accrued Fees

Accrued Fees refer to charges incurred by an entity for services performed but not yet billed or paid at the reporting date.

Adjusting Entry

An accounting record entry, created at the conclusion of an accounting cycle, that distributes earnings and expenses to their respective years.

Unearned Fees

Income received by a company for services to be provided in the future; recognized as a liability until the services are rendered.