Which of the Following Statements Is CORRECT

question 86

Multiple Choice

Which of the following statements is CORRECT?

• A) If a bond's yield to maturity exceeds its coupon rate, the bond will sell at par.
• B) All else equal, if a bond's yield to maturity increases, its price will fall.
• C) If a bond's yield to maturity exceeds its coupon rate, the bond will sell at a premium over par.
• D) All else equal, if a bond's yield to maturity increases, its current yield will fall.
• E) A zero coupon bond's current yield is equal to its yield to maturity.

---

Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity of goods or services demanded in the market.

Price Controls

Government-imposed limits on the prices that can be charged for goods and services, intended to curb inflation or protect consumers.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded; also known as the market-clearing price.

Equilibrium Quantity

The measure of goods or services that are supplied and demanded at the price of equilibrium within a market setting.