Which of the Following Statements Is False

question 16

Multiple Choice

Which of the following statements is false?

• A) Prices of bonds with lower durations are more sensitive to interest rate changes.
• B) When a bond is trading at a discount, the price increase between coupons will exceed the drop when a coupon is paid, so the bond's price will rise and its discount will decline as time passes.
• C) Coupon bonds may trade at a discount, at a premium, or at par.
• D) The sensitivity of a bond's price changes in interest rates is the bond's duration.

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