Which of the Following Statements Is False

question 27

Multiple Choice

Which of the following statements is false?

• A) By convention, practitioners always plot the yield of the most senior issued bonds, termed the on-the-run-bonds.
• B) We can determine the no-arbitrage price of a coupon bond by discounting its cash flows using the zero-coupon yields.
• C) If the zero-coupon yield curve is upward sloping, the resulting yield to maturity decreases with the coupon rate of the bond.
• D) The yield to maturity of a coupon bond is a weighted average of the yields on the zero-coupon bonds.

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Definitions:

Current Flow

The movement of electric charge through a conductor, typically measured in amperes.

Series Circuit

An electrical circuit in which components are connected end-to-end, forming a single path for current flow.

Wool Sweater

A clothing item knitted from wool yarn, known for its warmth and moisture-wicking properties.

Magnetomotive Force

The force that drives magnetic flux through a magnetic circuit, analogous to electromotive force in an electrical circuit.