The Yield-To-Maturity of a Par Bond Is

question 79

Multiple Choice

The yield-to-maturity of a par bond is:

• A) Greater than the current yield
• B) Less than the current yield
• C) Equal to the coupon rate
• D) Less than the coupon rate
• E) Greater than the coupon rate

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Definitions:

Required Reserve Ratio

The fraction of deposits that a bank must hold in reserve and cannot lend out, set by the central bank to control the money supply.

Tax Cut

A reduction in the amount of taxes imposed by a government on individuals or businesses.

Gross Domestic Product

A measure of the economic productivity of a country, quantifying the total value of all goods and services produced over a specific time period.

Planned Investment

Future directed expenditure by firms on physical assets like machinery and buildings, anticipated to enhance productivity.