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    Bonds

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    Which of the following statements is true?

    a. A bond that has a rating of AA is considered to be a junk bond.
    b. A bond will sell at a premium if the prevailing required rate of return is less than the bond's coupon rate.
    c. A zero coupon is a bond that is secured by a lien on real property.
    d. The legal document that describes all of the terms and conditions of a bond issue is called a debenture agreement.

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    Solution Preview

    a. A bond that has a rating of AA is considered to be a junk bond.

    This is false since AA is an investment grade rating

    b. A bond will sell at a premium if the prevailing ...

    Solution Summary

    The solution explains the correct alternative relating to bonds

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