Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A)Prices of bonds with lower durations are more sensitive to interest rate changes.
• B)When a bond is trading at a discount,the price increase between coupons will exceed the drop when a coupon is paid,so the bond's price will rise and its discount will decline as time passes.
• C)Coupon bonds may trade at a discount,at a premium,or at par.
• D)The sensitivity of a bond's price to changes in interest rates is the bond's duration.

---

Definitions:

Closest In Proximity

Refers to the physical or relational closeness of objects, individuals, or concepts, denoting minimal distance or the closest position relative to a point of reference.

Cognitive View

An approach or perspective that focuses on the mental processes involved in knowing, perceiving, and thinking.

Attachment

An emotional bond that forms between individuals, typically between a child and caregiver, which is crucial for personal development.

Erikson

Refers to Erik Erikson, a developmental psychologist known for his theory on the psychosocial development of human beings across eight stages.