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:

American Sentiment

Refers to the collective attitudes, feelings, or opinions of the American people, often in the context of patriotism or national issues.

Truman Administration

The period of U.S. presidency under Harry S. Truman, from 1945 to 1953, notable for its implementation of the Marshall Plan, the establishment of NATO, and the beginning of the Cold War.

Berlin Airlift

A military operation in 1948-1949 where Western allies supplied West Berlin by air during the Soviet blockade.

Soviet Union

A federal socialist state in Eurasia that existed from 1922 to 1991, composed of multiple republics, and a principal actor in the Cold War.