5) Which of the following statement is true? Discount yield is always lower than
ID: 2709748 • Letter: 5
Question
5) Which of the following statement is true?
Discount yield is always lower than bond equivalent yield on the same security.
Discount yield is always higher than bond equivalent yield on the same security.
Discount yield is always equal to bond equivalent yield on the same security.
Discount yield can be lower or higher than bond equivalent yield on the same security.
A.Discount yield is always lower than bond equivalent yield on the same security.
B.Discount yield is always higher than bond equivalent yield on the same security.
C.Discount yield is always equal to bond equivalent yield on the same security.
D.Discount yield can be lower or higher than bond equivalent yield on the same security.
Explanation / Answer
The correct answer is
D.
Discount yield can be lower or higher than bond equivalent yield on the same security.
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