Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) We can use the law of one price to compute the price of a coupon bond from the prices of zero-coupon bonds.
• B) The plot of the yields of coupon bonds of different maturities is called the coupon-paying yield curve.
• C) It is possible to replicate the cash flows of a coupon bond using zero-coupon bonds.
• D) Because the coupon bond provides cash flows at different points in time, the yield to maturity of a coupon bond is the simple average of the yields of the zero-coupon bonds of equal and shorter maturities.

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Definitions:

Intelligence Quotient

A measure of a person's intellectual abilities in relation to the average performance of others in their age group.

Deviation Scores

Statistical measures that indicate the difference between an observed value and the mean of a dataset, showing how far from the "normal" a particular value lies.

Normal Distribution

A bell-shaped distribution of data where most values cluster around a central mean or average value.

Mental Age

An estimate of an individual's level of cognitive development compared to others, based on performance in intelligence tests.