Which of the Following Statements Is CORRECT

question 50

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:

Budgeted Sales

Predicted sales revenue for a future period, based on historical data, market analysis, and other forecasting methods.

Cash Collected

The total amount of money received by a company or individual during a specific period, typically from sales, services, or other transactions.

Selling Expense

Costs incurred to sell products, including advertising, sales commissions, and the expenses of the sales staff.

Sales Collection

The process of receiving payments from customers for goods or services sold.