Which of the following statements is correct? A) Other things held constant,a callable bond would have a lower required rate of return than a noncallable bond. B) Other things held constant,a corporation would rather issue noncallable bonds than callable bonds. C) Reinvestment rate risk is worse from a typical investor's standpoint than interest rate price risk. D) If a 10-year,$1,000 par,zero coupon bond were issued at a price which gave investors a 10 percent rate of return,and if interest rates then dropped to the point where r_d = YTM = 5%,we could be sure that the bond would sell at a premium over its $1,000 par value. E) If a 10-year,$1,000 par,zero coupon bond were issued at a price which gave investors a 10 percent rate of return,and if interest rates then dropped to the point where r_d = YTM = 5%,we could be sure that the bond would sell at a discount below its $1,000 par value.

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The Answer of Which of the following statements is correct? A) Other things held constant,a callable bond would have a lower required rate of return than a noncallable bond. B) Other things held constant,a corporation would rather issue noncallable bonds than callable bonds. C) Reinvestment rate risk is worse from a typical investor's standpoint than interest rate price risk. D) If a 10-year,$1,000 par,zero coupon bond were issued at a price which gave investors a 10 percent rate of return,and if interest rates then dropped to the point where r_d = YTM = 5%,we could be sure that the bond would sell at a premium over its $1,000 par value. E) If a 10-year,$1,000 par,zero coupon bond were issued at a price which gave investors a 10 percent rate of return,and if interest rates then dropped to the point where r_d = YTM = 5%,we could be sure that the bond would sell at a discount below its $1,000 par value.

Which of the Following Statements Is Correct