Which of the Following Statements Is FALSE

question 6

Multiple Choice

Which of the following statements is FALSE?

• A)The assumption that underlies the yield calculation of a callable bond-that it will not be called-is not always realistic,so bond traders often quote the yield to call.
• B)The yield to call (YTC)is the annual yield of a callable bond assuming that the bond is called at the earliest opportunity.
• C)We can think of the yield to maturity of a callable bond as the interest rate the bondholder receives if the bond is not called and repaid in full.
• D)Because the price of a callable bond is higher than the price of an otherwise identical non-callable bond,the yield to maturity of a callable bond will be lower than the yield to maturity for its non-callable counterpart.

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Definitions:

Behavior Modification

A process of changing or shaping behavior through various techniques and strategies, often based on principles of learning and conditioning.

Shaping

A behavioral technique involving the reinforcement of successive approximations of a desired behavior until the final target behavior is achieved.

Reinforces

Stimuli that strengthen or increase the likelihood of a behavior by being presented as a consequence of that behavior.

Calf

A young bovine animal, especially the young of the domestic cow or a young elephant, whale, hippo, or moose.