The correct answer is: B. Baud rate is always smaller than the bit rate.
The baud rate is the number of times per second that a signal changes state. The bit rate is the number of bits transmitted per second. In digital data transmission, each bit is represented by a change in state of the signal. Therefore, the baud rate is always smaller than the bit rate.
For example, if a signal is transmitted at 100 baud, and each bit is represented by a change in state of the signal, then the bit rate is 100 bits per second.
Option A is incorrect because the baud rate is not always equal to the bit rate.
Option C is incorrect because the baud rate is not always higher than the bit rate.
Option D is incorrect because only option B is correct.
Option E is incorrect because option B is correct.