Which of the Following Statements Is False

question 76

Multiple Choice

Which of the following statements is false?

• A) The amount of each coupon payment is determined by the coupon rate of the bond.
• B) Prior to its maturity date, the price of a zero-coupon bond is always greater than its face value.
• C) The simplest type of bond is a zero-coupon bond.
• D) Treasury bills are the Canadian government bonds with a maturity of up to one year.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, thus having an interest in its performance and profitability.

Corporation

A legal entity that is separate from its owners, providing them with limited liability, and has the ability to own assets, incur liabilities, and sell shares.

Interest Rate

The percentage charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.

Normal Return

The minimum profit necessary to keep a company in business, regarded as the cost of capital in the long run.