The Closer the Yield to Maturity on a Bond to the Stated

question 55

True/False

The closer the yield to maturity on a bond to the stated rate, the closer to par the bond will trade.

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Definitions:

Validity

The extent to which a method or procedure measures what it is supposed to measure.

Psychometric View

An approach in psychology that focuses on the measurement of mental functions, intelligence, abilities, and attitudes through the use of tests and questionnaires.

Intelligence

The capacity for learning, understanding, and applying knowledge and skills, and the ability to adapt to new situations.

Predictive Validity

The degree to which a score obtained from a test or scale forecasts an individual’s future achievements on a similar activity.