Which of the Following Statements Is False

question 62

Multiple Choice

Which of the following statements is false?

• A) When a bond is trading at a discount, the price drop when a coupon is paid will be larger than the price increase between coupons, so the bond's discount will tend to decline as time passes.
• B) When a bond trades at a price equal to its face value, it is said to trade at par.
• C) As interest rates and bond yields rise, bond prices will fall.
• D) Ultimately, the prices of all bonds approach the bond's face value when the bonds mature and their last coupons are paid.

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Definitions:

Profits Maximize

The process or strategy by which a firm seeks to achieve the highest possible return or benefit from its operations and resources.

Monopolist

A single seller in a market who has significant control over the prices and supply of a product or service.

Profit Maximizing

The process or strategy of adjusting production and sales to achieve the highest possible profit.

Profit Level

Refers to the degree of financial gain achieved by a business, indicating its success in generating earnings above its costs.