Which of the Following Statements Is Correct

question 77

Multiple Choice

Which of the following statements is correct?

• A) Bond prices and interest rates move in the same direction,i.e. ,if interest rates rise,so will bond prices.
• B) The market price of a discount bond will approach the bond's par value as the maturity date approaches.Barring changes in the probability of default,there is no way the value of the bond can fail to increase each year as the time to maturity approaches.
• C) The "current yield" on a noncallable discount bond will normally exceed the bond's yield to maturity.
• D) The "current yield" on a noncallable discount bond will normally exceed the bond's coupon interest rate.

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Definitions:

Chunking

Using working memory to organize information into meaningful units to make it easier to remember.

Social Security

A government program designed to provide financial assistance to individuals during retirement, disability, or other qualifying circumstances.

Dual Coding

A theory in cognitive psychology suggesting that information can be remembered in both verbal and visual forms, enhancing memory and learning.

Maintenance Rehearsal

A cognitive process that involves repeatedly verbalizing or thinking about a piece of information to keep it in short-term memory longer.