Which of the Following Statements Is FALSE

question 72

Multiple Choice

Which of the following statements is FALSE?

• A)Given the spot interest rates,we can determine the price and yield of any other default-free bond.
• B)As the coupon increases,earlier cash flows become relatively less important than later cash flows in the calculation of the present value.
• C)When the yield curve is flat,all zero-coupon and coupon-paying bonds will have the same yield,independent of their maturities and coupon rates.
• D)When U.S.bond traders refer to "the yield curve," they are often referring to the coupon-paying Treasury yield curve.

---

Definitions:

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Price Index

A statistical measure that shows changes in the average price level of a selected basket of goods and services over time.

Real Gross Domestic Product

The total value of all goods and services produced within a country in a specific period, adjusted for inflation, indicating the actual growth of an economy.

Intrinsic Value

The actual, fundamental value of an asset, irrespective of its market value, determined through objective calculation or estimation.