The Yield to Call Is a More Conservative Yield Measure

question 67

Multiple Choice

The yield to call is a more conservative yield measure whenever the price of a callable bond is quoted at a value

• A) equal to or greater than par plus one year's interest.
• B) equal to par.
• C) equal to par less one year's interest.
• D) less than par.
• E) 5 percent over par.

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Definitions:

Binding Price Ceiling

A Binding Price Ceiling is a government-imposed limit on the price charged for a product or service that is set below the market equilibrium, leading to shortages.

Treadmills

Exercise equipment designed for walking or running in place, often used in fitness routines to improve cardiovascular health.

Shortage

An occurrence in which the need for a particular product or service surpasses the available amount in the market.

Binding Price Ceiling

A legally imposed price limit that is set below the equilibrium price, leading to a shortage as demand exceeds supply at that price level.