If a Bond Offers a Current Yield of 5% and a Yield

question 34

Multiple Choice

If a bond offers a current yield of 5% and a yield to maturity of 5.45%,then the:

• A) bond is selling at a discount.
• B) bond has a high default premium.
• C) promised yield is not likely to materialize.
• D) bond must be a Treasury Inflation-Protected Security.

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Definitions:

Trypanosome

A genus of unicellular parasitic flagellate protozoa, some species of which cause diseases such as sleeping sickness in humans and animals.

Sleeping Sickness

A parasitic disease transmitted by the tsetse fly, characterized by fever, headaches, joint pains, and sleep disturbances.

Incomplete Digestive Tract

A type of digestive system where a single opening serves as both mouth and anus, common in simpler organisms like cnidarians and flatworms.

Trachea

In insects, air tube located between the spiracles and the tracheoles. In tetrapod vertebrates, air tube (windpipe) that runs between the larynx and the bronchi.