Which of the Following Is False

question 22

Multiple Choice

Which of the following is false?

• A)The price of a previously issued bond is the present value of the future stream of income discounted at the current interest rate on a security of equal risk, liquidity, and maturity.
• B)The discount rate for bonds includes the risk free rate plus the appropriate risk premium.
• C)A bond generally makes monthly coupon payments.
• D)Treasuries are considered to be default risk free.

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Definitions:

Federal Law

Laws created and enforced by the federal government of a country, as opposed to state, local, or international laws.

Grace Period

A set length of time after a due date during which a payment can be made without penalty.

Advanced Notice

A notification given in advance to inform of future events or actions.

Insurance Company

An entity that provides financial protection and compensation for losses to individuals and entities under the terms of an insurance contract.