Which One of the Following Must Be Correct for a Bond

question 32

Multiple Choice

Which one of the following must be correct for a bond currently selling at a premium?

• A) Its coupon rate is variable.
• B) Its current yield is lower than its coupon rate.
• C) Its yield to maturity is higher than its coupon rate.
• D) Its coupon rate is lower than the current market rate on similar bonds.

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Definitions:

Nonmonetary Forms

Nonmonetary forms involve values or transactions that do not have a direct monetary value or involve the exchange of money, such as volunteer work or bartering systems.

Commercial Transactions

The exchange of goods, services, or financial assets between parties in a business environment.

Private Property

Land or belongings owned by individuals or organizations rather than by the state or public entities.

Cultural Imperialism

The practice of promoting the culture or language of one nation in another, often at the expense of the native culture.