The Expected Yield of a Bond Will Be Less Than

question 62

Multiple Choice

The expected yield of a bond will be less than its yield to maturity when

• A) market interest rates are expected to rise.
• B) market interest rates are expected to fall.
• C) the expected yield of a bond cannot be lower than its yield to maturity.
• D) when the bond is purchased at a discount.

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Definitions:

Salience

The quality of being particularly noticeable or important; prominence.

Stereotypes

Oversimplified generalized beliefs about a particular group of people or things.

Diminished Judgement

A state or condition where a person's ability to make considered decisions or evaluations is impaired or reduced.

Sorting

The process of arranging items in a systematic order or classifying them into categories.