If a Bond Is Purchased at a Price Above the Face

question 45

Multiple Choice

If a bond is purchased at a price above the face value,the yield to maturity is:

• A)greater than the stated interest rate.
• B)the same as the stated interest rate.
• C)less than the stated interest rate.
• D)zero.
• E)of no significance.

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Definitions:

Schedule Preference

Refers to an individual's or group's favorability towards certain times or periods for performing tasks or activities.

Motivation

The internal drive or external incentive that stimulates energy, direction, and persistence in behavior towards achieving specific goals.

Instrumentality

The perception that a certain level of effort will lead to a specific level of performance.

Motivation Process

The psychological mechanisms and factors that drive individuals towards achieving certain goals or fulfilling specific needs.