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.

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Definitions:

Psychological Magnitude

The perceived size, intensity, or importance of a psychological process or stimulus, often related to how individuals assess and experience various psychological phenomena.

Physical Intensity

The magnitude or strength of a physical quantity or phenomena, such as light, sound, or exercise.

Psychophysics

The branch of psychology that studies the relationships between physical stimuli and the sensations and perceptions they produce.

Physical Intensity

The measurable amount of energy or force present in a physical phenomenon, such as sound or light.