A 15-Year Bond with a Face Value of $1,000 Currently

question 112

Multiple Choice

A 15-year bond with a face value of $1,000 currently sells for $850.Which statement regarding the bond's yield is true?

• A)The bond's coupon rate exceeds its current yield.
• B)The bond's current yield exceeds its yield to maturity.
• C)The bond's yield to maturity is greater than its coupon rate.
• D)The bond's current yield is equal to its coupon rate.

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Definitions:

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, music, or therapy.

Acculturative Stress

The psychological impact of adaptation to a new culture, including stress from losing cultural cues and identity.

General Adaptation Syndrome

A theory in psychology that defines the three stages of response (alarm, resistance, exhaustion) that the body goes through when exposed to chronic stress.

Type D Personality

A personality type characterized by high levels of stress, negativity, and the tendency to experience uncomfortable emotions.