Which One of the Following Statements Is Correct

question 51

Multiple Choice

Which one of the following statements is correct?

• A)Investors know the rate of return they will earn with certainty provided they hold bonds until they mature.
• B)Reinvestment risk causes realized yields to differ from promised yields.
• C)Realized yields generally equal promised yields as long as a bond is not called.
• D)Redeeming a bond early helps ensure an investor earns the promised yield.
• E)Realized yields cannot exceed promised yields.