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DLQ Inc Bonds Mature in 12 Years and Have a Coupon

Question 2

Multiple Choice

DLQ Inc. bonds mature in 12 years and have a coupon rate of 6 percent. If the market rate of interest increases, then the:


A) coupon rate will also increase.
B) current yield will decrease.
C) yield to maturity will be less than the coupon rate.
D) market price of the bond will decrease.
E) coupon payment will increase.

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