If a Bond's Yield-To-Maturity Is Greater Than the Appropriate Yield-To-Maturity

question 18

Multiple Choice

If a bond's yield-to-maturity is greater than the appropriate yield-to-maturity, the bond

• A) could have a positive or negative NPV.
• B) will have a positive NPV.
• C) will have an intrinsic value less than its market price.
• D) will have an intrinsic value equal to its market price.

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Definitions:

Repeated Use

Refers to the capability of an item or resource to be used multiple times, rather than being disposable after a single use.

Cumulative Probability

The probability of obtaining a value less than or equal to a particular value in a distribution.

Random Number Intervals

Ranges used in simulations that represent probabilities of different outcomes occurring.

Probability Distributions

Representations or functions that describe the likelihood of different outcomes or values within a range for a random variable.