If the Yield to Maturity on a Bond Is Greater

question 87

Multiple Choice

If the yield to maturity on a bond is greater than the coupon rate, you can assume:

• A) interest rates have decreased
• B) the price is below the par
• C) the price is above the par
• D) risk premiums have decreased

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Definitions:

Grasping Reflex

Grasping objects that touch the palms.

Moro Reflex

Arching the back, flinging out the arms and legs, and drawing them back to the chest in response to a sudden noise or change in position.

Reflex

An unlearned, stereotypical response to a stimulus.

Stereotypical Response

A predictable and oversimplified reaction based on preconceived notions about a group or situation.