Which of the Following Statements Is CORRECT

question 90

Multiple Choice

Which of the following statements is CORRECT?

• A) The market value of a bond will always approach its par value as its maturity date approaches.This holds true even if the firm has filed for bankruptcy.
• B) Rising inflation makes the actual yield to maturity on a bond greater than a quoted yield to maturity that is based on market prices.
• C) The yield to maturity on a coupon bond that sells at its par value consists entirely of a current interest yield; it has a zero expected capital gains yield.
• D) On an expected yield basis, the expected capital gains yield will always be positive because an investor would not purchase a bond with an expected capital loss.
• E) The yield to maturity for a coupon bond that sells at a premium consists entirely of a positive capital gains yield; it has a zero current interest yield.

---

Definitions:

Muscle

A tissue composed of fibers capable of contracting to effect bodily movement.

Torsion

The twisting of an organ or body part on its own axis, leading to potential blood flow restriction.

Tendon

A fibrous connective tissue that attaches muscle to bone, facilitating movement.

Fibrous Connective Tissue

This type of tissue functions mainly for support and protection in the body, consisting largely of bundles of collagen fibers and fibroblasts.