Which of the Following Statements Is FALSE

question 63

Multiple Choice

Which of the following statements is FALSE?

• A) If a bond is selling at a discount to par, then its current yield will be less than its yield to maturity.
• B) If a bond is selling at its par value, then its current yield equals its yield to maturity.
• C) If a bond is selling at a premium, then its current yield will be greater than its yield to maturity.
• D) All else equal, bonds with larger coupons have greater interest rate (price) risk than bonds with smaller coupons.

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Definitions:

Books

Bound printed works or electronic documents containing text or images, primarily for reading.

Coffee

A beverage made from roasted and ground coffee beans, widely consumed globally for its stimulating effect.

Preference

An economic term referring to the assumption that individuals have the capacity to order or rank different bundles of goods or outcomes in terms of their satisfaction.

Substitutes

Products or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.