When the Price of a Bond Is Above Face Value

question 45

Multiple Choice

When the price of a bond is above face value:

• A)The yield to maturity is below the coupon rate
• B)The yield to maturity will be above the coupon rate
• C)The yield to maturity will equal the current yield
• D)The yield to maturity will equal the coupon rate

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of the business owners.

Expenses

Costs incurred by a business in the process of earning revenue.

Owner's Equity

The residual interest in the assets of an entity after deducting liabilities, often seen as the net worth or book value of the company to the owners.

Consulting Revenues

Income generated from providing expert advisory services to clients.