If an Investor Purchases a Bond When Its Current Yield

question 91

Multiple Choice

If an investor purchases a bond when its current yield is higher than the coupon rate,then the bond's price will be expected to:

• A) decline over time, reaching par value at maturity.
• B) increase over time, reaching par value at maturity.
• C) be less than the face value at maturity.
• D) exceed the face value at maturity.

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Definitions:

Drug-drug

Refers to interactions between two or more drugs, which can affect how the drugs work or increase the risk of side effects.

Adverse Reactions

Undesirable or harmful reactions experienced after the administration of a drug or therapy.

Z-track

A technique for intramuscular injection that minimizes leakage of the medication into the subcutaneous tissue.

Imferon

A brand name for a medication composed of iron dextran, used to treat iron deficiency anemia.