Which of the Following Statements Is FALSE

question 9

Multiple Choice

Which of the following statements is FALSE?

• A)The IRR of an investment in a zero-coupon bond is the rate of return that investors will earn on their money if they buy a default-free bond at its current price and hold it to maturity.
• B)The yield to maturity of a bond is the discount rate that sets the future value of the promised bond payments equal to the current market price of the bond.
• C)Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields.
• D)When we calculate a bond's yield to maturity by solving the formula,Price of an n-period bond = + + ...+ ,the yield we compute will be a rate per coupon interval.

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Definitions:

Independent Variable

A variable in an experiment or study that is manipulated or changed to observe its effect on a dependent variable.

Independent Variable

A variable that is manipulated or changed in an experiment to see if it causes an effect on another variable.

Dependent Variable

The variable in a study or experiment that is observed for changes in response to alterations in the independent variable.

Independent Variable

A variable in an experiment or study that is manipulated to determine its effect on a dependent variable.