Which of the Following Statements Is CORRECT

question 55

Multiple Choice

Which of the following statements is CORRECT?

• A) On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
• B) On an expected yield basis, the expected current yield will always be positive because an investor would not purchase a bond that is not expected to pay any cash coupon interest.
• C) If a coupon bond is selling at par, its current yield equals its yield to maturity.
• D) The current yield on Bond A exceeds the current yield on Bond B; therefore, Bond A must have a higher yield to maturity than Bond B.
• E) If a bond is selling at a discount, the yield to call is a better measure of return than the yield to maturity.

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Definitions:

Sensation And Perception

The processes by which we sense our environment through touch, taste, sight, sound, and smell (sensation), and interpret these sensations to form a mental representation (perception).

Psychoanalysis

A therapeutic approach and theory of mind developed by Sigmund Freud, focusing on the unconscious mind, repressed conflicts, and childhood experiences.

Psychological Problems

Mental or emotional issues affecting an individual's thinking, behavior, and ability to function, often requiring clinical intervention.

Sigmund Freud

An Austrian neurologist best known for developing the theories and techniques of psychoanalysis.