Which of the Following Statements Is False

question 84

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 to changes in interest rates is the bond's duration.

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Definitions:

Net Sales

The total revenue generated from goods or services sold by a company, minus returns, allowances, and discounts.

Gross Profit

The financial result obtained after subtracting the cost of goods sold from total revenue, indicating the efficiency of a company in managing its production and labor costs.

Operating Expenses

Expenses incurred from the normal operations of a business, excluding the cost of goods sold, such as rent, salaries, and utilities.

Sales Revenue

The income received by a company from its sales of goods or services before any costs or expenses are deducted.