If a Bond Is Selling for Its Face Value,which of the Following

question 70

Multiple Choice

If a bond is selling for its face value,which of the following statements is true?

• A)The coupon rate and the yield to maturity are the same.
• B)The par value is less than the face value.
• C)This is only possible if this is a zero coupon bond.
• D)All of the statements above are true.

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Definitions:

Different Prices

The phenomenon that occurs when a seller sets varied prices for the same product in different markets or purchase contexts, often reflecting variations in demand elasticity.

Risk-Loving

A personality trait or behavior of individuals who prefer or seek out risk in their investment choices, with the potential for high returns.

Risk-Averse

A preference for guaranteed outcomes over those with uncertainty, indicating a desire to avoid risk.

Insurance

A financial product sold by insurance companies to safeguard the purchaser against the risk of loss, damage, or liability.