Which of the Following Is Correct for a Bond Currently

question 54

Multiple Choice

Which of the following is correct for a bond currently selling at a premium to par?

• A) Its current yield is higher than its coupon rate.
• B) Its current yield is lower than its coupon rate.
• C) Its yield to maturity is higher than its coupon rate.
• D) Its default risk is extremely low.

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Definitions:

Financial Reporting

The act of formulating disclosures that expose the fiscal health of an organization to those in management, investors, and regulatory authorities.

Financial Reporting Practices

The standards and rules that companies follow to accurately report their financial position and performance.

Countries

Nation states defined by geographical boundaries and governance.

IFRS

International Financial Reporting Standards, a set of global accounting standards for the preparation of public company financial statements.