Which of the Following Statements Is False

question 37

Multiple Choice

Which of the following statements is false?

• A) A bond trades at par when its coupon rate is equal to its yield to maturity.
• B) The clean price of a bond is adjusted for accrued interest.
• C) The price of the bond will drop by the amount of the coupon immediately after the coupon is paid.
• D) If a coupon bond's yield to maturity exceeds its coupon rate, the present value of its cash flows at the yield to maturity will be greater than its face value.

Understand the differing objectives of financial and managerial accounting.

Recognize the hierarchy and authority of various accounting standards and pronouncements.

Identify the primary markets where exchanges of stocks and bonds occur.

Appreciate the role and benefits of the FASB Accounting Standards Codification.

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Definitions:

Earnings Before Interest And Taxes

A measure of a company's profitability that includes income before the deduction of interest payments and taxes.

Sales Revenue

The income received by a company from its sales of goods or the provision of services, before any expenses are deducted.

Earnings Before Interest And Taxes

A financial performance measure that calculates a company's profitability before deductions for interest and taxes.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold.