Which of the Following Are Characteristics of a Premium Bond

question 33

Multiple Choice

Which of the following are characteristics of a premium bond?
I.coupon rate < yield-to-maturity
II.coupon rate > yield-to-maturity
III.coupon rate < current yield
IV.coupon rate > current yield

• A)I only
• B)I and III only
• C)I and IV only
• D)II and III only
• E)II and IV only

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing items like brand name, good customer relations, and reputation.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing what the shareholders own outright.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, showing total assets minus liabilities.

Fair Value Enterprise Method

involves estimating the value of an entire business using discounted cash flows or market comparables, focusing on the enterprise as a whole.