William Corp. bonds have a current yield of 7% and mature in 10 years. Smith Corp. bonds have a
current yield of 5% and mature in 10 years. Given this information, which of the following
statements is MOST correct?
A) Smith Corp. bonds are riskier than William Corp. bonds.
B) William Corp. bonds will have a higher yield to maturity than Smith Corp. bonds.
C) Smith Corp. bonds will sell for a lower price than William Corp. bonds.
D) If both bonds have the same yield to maturity, then the price of Smith Corp. bonds must be
less than the price of William Corp. bonds.
D
You might also like to view...
In a short essay, define standardization and include a discussion of beta coefficient and standardized regression coefficient to support your answer
What will be an ideal response?
For a stock investment, the dividend yield is calculated by
A) dividing a stock's annual cash dividend by its price. B) dividing a stock's price by its annual cash dividend. C) multiplying a stock's semi-annual dividend by two. D) dividing the annual change in the stock's price plus its annual dividend amount by the beginning of the year price.