Which Statement Regarding Bonds Is True

question 144

Multiple Choice

Which statement regarding bonds is true?

• A)The total yield on a bond is derived from dividends plus changes in the price of the bond.
• B)Bonds are riskier than common stocks and therefore have higher required returns.
• C)Bonds issued by larger companies always have lower yields to maturity (less risk) than bonds issued by smaller companies.
• D)The market value of a bond will always approach its par value as its maturity date approaches, provided the bond's required return remains constant.

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Definitions:

Living Wills

Legal documents that detail a person's wishes regarding medical treatments in situations where they are unable to communicate their decisions.

Intestate

A legal term referring to the condition of dying without a valid will, resulting in one's estate being distributed according to statutory laws.

Escheat

A legal process where unclaimed or abandoned property reverts to the state if no lawful heir is found or claimed.

Property

Assets or possessions owned by an individual or entity, including tangible items like land or buildings and intangible items like intellectual property.