If the Current Price of a Bond Is Greater Than

question 75

Multiple Choice

If the current price of a bond is greater than its face value

• A)an investor will receive a capital gain by holding the bond until maturity.
• B)the yield to maturity must be less than the coupon rate.
• C)the coupon rate must be less than the current yield.
• D)the coupon rate must be equal to the current yield.

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Definitions:

Composite Units

A measurement used in accounting to collectively represent a group of similar items or transactions as a single entity.

Break-Even Point

The point at which total costs and total revenue are equal, meaning the business is neither making a profit nor a loss.

Sales Mix

The combination of different products or services that a company sells, influencing overall sales volume, revenues, and profits.

Break-Even Point

The level of production or sales at which total costs equal total revenue, resulting in zero profit or loss.