A bond that has a yield of 4 must have a price that is higer

A bond that has a yield of 4% must have a price that is higer than/lower than/equal to a stock that has a growth rate of 6%.

Solution

1. A bond that has a yield of 4% must have a price that is lower than a stock that has a growth rate of 6%.

Because as the Bon is giving 4% yield to investor where as stock is giving 6% growth rate which is higher than the yield of 4% and thus investor will pay higher price to get stock than bond. Thus Price of Bond will be lower than stock