Which of the Following Is True for a Coupon Bond

question 47

Multiple Choice

Which of the following is true for a coupon bond?

• A) When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate.
• B) The price of a coupon bond and the yield to maturity are positively related.
• C) The yield to maturity is greater than the coupon rate when the bond price is above the par value.
• D) The yield is less than the coupon rate when the bond price is below the par value.

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Definitions:

Arms Race

An escalating competition between two or more states to possess superior military capabilities, often leading to increased spending and development of new weapons.

Fisheries Management

The regulation and supervision practices aimed at preserving fish stocks and marine habitats to ensure sustainable use and conservation of aquatic resources.

Distinct Group

A set of individuals or entities that are clearly differentiated from others by specific characteristics, such as cultural, professional, or demographic traits.

Individual Transferable Quota (ITQ)

A regulatory tool used in fisheries management that limits the total catch and allocates specific quotas to individuals which can be traded.