Which of the Following Statements Is FALSE

question 108

Multiple Choice

Which of the following statements is FALSE?

• A)If a bond trades at a premium,its yield to maturity will exceed its coupon rate.
• B)A bond that trades at a premium is said to trade above par.
• C)When a coupon-paying bond is trading at a premium,an investor's return from the coupons is diminished by receiving a face value less than the price paid for the bond.
• D)Holding fixed the bond's yield to maturity,for a bond not trading at par,the present value of the bond's remaining cash flows changes as the time to maturity decreases.

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Definitions:

Best Fit

"Best fit" refers to a line or curve that most closely approximates the data points in a scatter plot, used in linear regression and other modeling techniques to predict outcomes.

Multiple Regression

A statistical approach that involves using several predictor variables to determine the expected outcome of a response variable.

Criterion

A standard or test by which something can be judged or recognized.