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Question
When making a direct comparison between the yield to maturity on a U.S. fixed-ratebond and a Eurodollar fixed rate bond:
a. An adjustment must be made because Eurodollar bonds pay annually rather than semiannually.
b. Given the yield on a Eurodollar fixed-rate bond, the bond-equivalent yield will always be lower.
c. Given the yield on a U.S. fixed-rate bond, the yield to maturity on an annual basis is always less than the yield to maturity on a bond-equivalent basis.
d. a and b only.
e. a and c only.
Answer
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