Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) A bond trades at par when its coupon rate is equal to its yield to maturity.
• B) To get the actual cash price of a bond, the clean price must be adjusted for accrued interest.
• C) The price of the bond will drop by the amount of the coupon immediately after the coupon is paid.
• D) If a coupon bond's yield to maturity exceeds its coupon rate, the present value of its cash flows at the yield to maturity will be greater than its face value.

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Definitions:

Valence Shell Electron Pair Repulsion Theory

A model used to predict the geometry of individual molecules based on the repulsion between electron pairs around a central atom.

Molecular Geometry

The three-dimensional arrangement of atoms within a molecule, determined by the spatial distribution of electrons and the resulting chemical bonds.

Water Molecule

A molecule consisting of two hydrogen atoms bonded to one oxygen atom, represented chemically as H2O.

Molecular Shape

The three-dimensional arrangement of atoms within a molecule, determined by the chemical bonds and electron pairs surrounding the central atom.