Which of the Following Statements Is False

question 65

Multiple Choice

Which of the following statements is false?

• A) Bond prices converge to the bond's face value due to the time effect, but simultaneously move up and down due to unpredictable changes in bond yields.
• B) As interest rates and bond yields fall, bond prices will rise.
• C) Bonds with higher coupon rates are more sensitive to interest rate changes.
• D) Shorter maturity zero coupon bonds are less sensitive to changes in interest rates than are longer-term zero coupon bonds.

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