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

question 87

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 statements are correct.

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Definitions:

Psychoactive Drugs

Substances that affect the mind, mood, or behavior by altering the brain's chemical function.

Narcotics

Drugs that relieve pain and often induce sleep, typically used for pain relief but have a high potential for abuse or addiction.

Rapid Development

The process of quickly bringing a new product or technology to the market or achieving progress in a short amount of time.

Tolerance

Tolerance is the capacity to endure pain or hardship, or in pharmacology, it refers to the body's adaptation to a drug which reduces its effects over time.