Which of the Following Statements Is CORRECT

question 22

Multiple Choice

Which of the following statements is CORRECT?

• A) A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate.
• B) If a bond sells at par, then its current yield will be less than its yield to maturity.
• C) If a bond sells for less than par, then its yield to maturity is less than its coupon rate.
• D) A discount bond's price declines each year until it matures, when its value equals its par value.
• E) Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par.The premium bond must have a lower current yield and a higher capital gains yield than the par bond.

---

Definitions:

Vertebral Arteries

Arteries that ascend in the neck and supply blood to the brain and spinal column.

Velocity

The rate of change of an object's position with respect to time, incorporating both speed and the direction of movement.

Arterioles

Small branches of arteries leading into capillaries, key in regulating blood flow and pressure.

Aorta

The aorta is the largest artery in the body, originating from the left ventricle of the heart and extending down to the abdomen, where it splits into smaller arteries.