Which of the Following Statements Is FALSE

question 89

Multiple Choice

Which of the following statements is FALSE?

• A)When a bond is trading at a discount,the price drop when a coupon is paid will be larger than the price increase between coupons,so the bond's discount will tend to decline as time passes.
• B)When a bond trades at a price equal to its face value,it is said to trade at par.
• C)As interest rates and bond yield rise,bond prices will fall.
• D)Ultimately,the prices of all bonds approach the bond's face value when the bonds mature and their last coupon is paid.

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Definitions:

Gross Income

Total income from all sources before deductions, exemptions, and taxes.

Insured

A person or entity covered under an insurance policy, providing protection against specified risks or losses.

Taxable Income

Income subject to tax, after deductions and exemptions, according to federal or state law.

Alimony Payments

Payments made to a spouse or former spouse under a divorce or separation agreement, possibly subject to special tax treatment.