Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A)When the prevailing market interest rate is lower than the coupon rate, the bond will be traded at a premium.
• B)When the prevailing market interest rate is higher than the coupon rate, the bond will be traded at a discount.
• C)The longer the time to maturity, the less sensitive the market price of the bond becomes to changes in prevailing market rates.
• D)The higher the coupon rate, the less sensitive the market price of the bond becomes to changes in prevailing market rates.

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Definitions:

Purchase Order

A formal document sent from a buyer to a seller to initiate the purchase of products or services with specified terms.

Vendor

An individual or company that sells goods or services to another entity, typically within a supply chain.

Petty Cash

A small amount of cash kept on hand for making immediate payments for miscellaneous small expenses in an office or business.

Purchase Requisition

A document used in the procurement process to request authorization for a purchase order.