Which of the Following Statements About the Relationship Between Yield

question 81

Multiple Choice

Which of the following statements about the relationship between yield to maturity and bond prices is FALSE?

• A)When the yield to maturity and coupon rate are the same,the bond is called a par value bond.
• B)A bond selling at a premium means that the coupon rate is greater than the yield to maturity.
• C)When interest rates go up,bond prices go up.
• D)A bond selling at a discount means that the coupon rate is less than the yield to maturity.

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Definitions:

R&D (Research and Development)

This involves activities that companies undertake to innovate and introduce new products or services. It's a critical component of maintaining relevance and competitiveness in the market.

Interest

The charge for borrowing money, typically expressed as an annual percentage rate, or the income earned from investing funds.

Sunk Cost

A sunk cost refers to money already spent and permanently lost, which cannot be recovered and should not impact future business decisions.

Externality

A cost or benefit that affects a party who did not choose to incur that cost or benefit, often seen in environmental and public goods scenarios.