​Which of the Following Is Not True If Interest Rates

question 29

Multiple Choice

​Which of the following is not true if interest rates rise?

• A) ​Existing bonds may be called.
• B) ​Prices of existing bonds fall.
• C) ​The yield to maturity rises more than the current yield.
• D) ​The market price of a zero coupon bond falls.

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Definitions:

LIFO Reserve

An accounting term that represents the difference between the cost of inventory calculated using the Last-In, First-Out (LIFO) method and using the First-In, First-Out (FIFO) method.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and equipment costs.