Which of the Following Statements Is False

question 37

Multiple Choice

Which of the following statements is false?

• A) The assumption that underlies the yield calculation of a callable bond-that it will not be called-is not always realistic, so bond traders often quote the yield to call.
• B) The yield to call (YTC) is the annual yield of a callable bond assuming that the bond is called at the earliest opportunity.
• C) We can think of the yield to maturity of a callable bond as the interest rate the bondholder receives if the bond is not called and repaid in full.
• D) Because the price of a callable bond is higher than the price of an otherwise identical non-callable bond, the yield to maturity of a callable bond will be lower than the yield to maturity for its non-callable counterpart.

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Definitions:

Relative Calm

A state of peace or tranquility compared to a previous or typical level of activity or agitation.

Public Agencies

Government organizations that implement laws, policies, and offer services to the public.

Organizational Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution or organization.

Short Period

A brief span of time, typically suggesting a duration that is relatively transitory or temporary.