The Investor in Deep-Discount Bonds Generally Accepts a Lower Yield

question 51

Multiple Choice

The investor in deep-discount bonds generally accepts a lower yield because of:

• A)the unique conversion feature associated with deep discount bonds.
• B)the extremely low risk of a call.
• C)the fact that the return represents pure interest income.
• D)More than one of the above

---

Definitions:

Trial Court

The level of court in which a legal dispute is first heard and evidence is presented, as opposed to appellate courts.

Appellate Court

A court that hears appeals from the decisions of lower courts, focusing on errors of law.

United States Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal and state court cases involving matters of federal law.

Cases Review

The process of examining legal cases by higher courts to assess the application of law and potentially revise decisions made in lower courts.