Which One of the Following Statements Applies to a Par

question 49

Multiple Choice

Which one of the following statements applies to a par value bond?

• A)The current yield is less than the coupon rate.
• B)The yield to maturity equals the risk-free, or Treasury bill, rate.
• C)The par value exceeds the market price.
• D)The current yield, coupon rate, and yield to maturity are equal.
• E)The dirty price equals the clean price.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset as it is used.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses, indicating the profit made during a specific period.

Operating Activities

Activities directly related to the operation of the business, including production, sales, and day-to-day business management.