Which of the Following Statements Is CORRECT

question 52

Multiple Choice

Which of the following statements is CORRECT?

• A) all else equal, a bond that has a coupon rate of 10% will sell at a discount if the required return for bonds of similar risk is 8%.
• B) the price of a discount bond will increase over time, assuming that the bond's yield to maturity remains constant.
• C) for a given firm, its debentures are likely to have a lower yield to maturity than its mortgage bonds.
• D) when large firms are in financial distress, they are almost always liquidated, whereas smaller firms are generally reorganized.
• E) the total return on a bond during a given year consists only of the coupon interest payments received.

---

Definitions:

Internet bulletin boards

Online platforms where users can post messages, discuss various topics, and share information.

Written records

Documented evidence or data that is stored in a written or printed format.

Archival research

Involves the study and analysis of existing records or archives to extract data or insights into historical or current trends and patterns.

Case studies

Research method involving an up-close, in-depth, and detailed examination of a subject of study (the case), as well as its related contextual conditions.