Which of the Following Statements Is CORRECT

question 66

Multiple Choice

Which of the following statements is CORRECT?

• A) If a coupon bond is selling at a discount, its price will continue to decline until it reaches its par value at maturity.
• B) If interest rates increase, the price of a 10-year coupon bond will decline by a greater percentage than the price of a 10-year zero coupon bond.
• C) If a bond's yield to maturity exceeds its annual coupon, then the bond will trade at a premium.
• D) If a coupon bond is selling at a premium, its current yield equals its yield to maturity.
• E) If a coupon bond is selling at par, its current yield equals its yield to maturity.

---

Definitions:

Total Assets

The sum of all assets (current and non-current) owned by a business.

Retained Earnings

It represents the cumulative amount of net income earned by a company that is retained rather than distributed to its shareholders as dividends.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, reflecting the ownership interest of shareholders.

Cash Dividend

A cash dividend is a payment made by a company out of its profits to shareholders, typically on a quarterly basis, in the form of cash.