Which of the Following Is Correct for a Bond Investor

question 50

Multiple Choice

Which of the following is correct for a bond investor whose bond offers a 5 percent current yield and an 8 percent yield to maturity?

• A)The bond is selling at a discount to par value
• B)The bond has a high default premium
• C)The promised yield is not likely to materialize
• D)The security must be a Canada bond

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Capital Account Balance

The net result of public and private international investments flowing in and out of a country, representing changes in national ownership of assets.

Partnership Capital

Represents the total equity or interest that partners have in a partnership, which can be changed through additional contributions or withdrawals.

Admit May

A term that appears to refer to the acceptance or permission granted in the month of May, but without a specific context, its exact meaning may vary.