If a Bond Is Selling at a Discount, Which of the Following

question 60

Multiple Choice

If a bond is selling at a discount, which of the following statements is correct?

• A)The current yield must be greater than the coupon rate.
• B)The coupon rate must be greater than the yield to maturity.
• C)The bond must have a low bond rating.
• D)All of these choices are correct.

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Definitions:

Population Parameter

A numerical value that represents a characteristic or measure of an entire population.

Population Standard Error

A measure of how much the sample mean of a population is likely to vary from the true population mean.

Confidence Interval

An array of values, sourced from statistical analysis of a sample, believed to cover the value of an unspecified population parameter.

Mean

The average of a set of numerical values, calculated by adding all the figures together and then dividing by the number of values.