Which One of the Following Must Be Correct for a Bond

question 32

Multiple Choice

Which one of the following must be correct for a bond currently selling at a premium?

• A) Its coupon rate is variable.
• B) Its current yield is lower than its coupon rate.
• C) Its yield to maturity is higher than its coupon rate.
• D) Its coupon rate is lower than the current market rate on similar bonds.

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Definitions:

Intermediary

An entity or person that acts as a link between different parties in a business transaction.

Indirect Exporting

A business strategy where a company sells its products overseas through intermediaries instead of dealing with foreign markets directly.

Direct Exporting

The process of selling goods directly from a manufacturer to foreign markets without intermediaries.

Selected Markets

Specified segments of the broader market that a company chooses to target for its marketing efforts, products, or services.