Which of the Following Statements Is CORRECT

question 71

Multiple Choice

Which of the following statements is CORRECT?

• A) the total yield on a bond is derived from dividends plus changes in the price of the bond.
• B) bonds are riskier than common stocks and therefore have higher required returns.
• C) bonds issued by larger companies always have lower yields to maturity (less risk) than bonds issued by smaller companies.
• D) the market value of a bond will always approach its par value as its maturity date approaches, provided the bond's required return remains constant.
• E) if the federal reserve unexpectedly announces that it expects inflation to increase, then we would probably observe an immediate increase in bond prices.

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Definitions:

Pearson's Correlations

A measure of the linear correlation between two variables, represented by a value between -1 and 1 where 1 means a perfect positive correlation and -1 means a perfect negative correlation.

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Hispanic Populations

Hispanic populations refer to communities or groups of people who have cultural or ancestral ties to Spain, Latin America, or Spanish-speaking countries.

Pearson's Correlations

A measure of the linear correlation between two variables X and Y, showing the strength and direction of their relationship.