A Bond Has a Current Yield That Is Equal to the Yield

question 103

Multiple Choice

A bond has a current yield that is equal to the yield to maturity. Given this, which one of the following must also be true?

• A)The bond must pay annual interest.
• B)The maturity value must be greater than the bond price.
• C)The bond can have any maturity date.
• D)The coupon rate must exceed the current yield.
• E)The price must exceed the par value.

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Definitions:

Activity-based Costing

A methodology that assigns manufacturing overhead costs to products in a more logical manner based on the activities that incur costs.

Floral Bouquets

An arrangement of flowers, typically designed and wrapped for decorative or gifting purposes.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or factory, applied to all production units equally.

Activity-based Costing

A costing method that allocates overhead costs to specific activities, providing more accurate product costing.