The Value of a Bond Is Dependent on The

question 98

Multiple Choice

The value of a bond is dependent on the:

• A)coupon rate and the current yield.
• B)coupon rate and the yield to maturity.
• C)current yield and the yield to maturity.
• D)coupon rate but neither the current yield nor the yield to maturity.
• E)yield to maturity but neither the current yield nor the coupon rate.

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Definitions:

Indirectly Borrowing

Obtaining funds through an intermediary, such as by taking out a loan through a bank, rather than directly from a lender.

Bonds

Bonds are fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest payments and repays the principal at maturity.

Financial Intermediaries

Institutions that facilitate the channeling of funds between lenders and borrowers.

Financial Assets

Instruments that hold monetary value, such as stocks, bonds, or bank deposits, which can be traded in financial markets.