Which of the Following Statements Is False

question 43

Multiple Choice

Which of the following statements is false?

• A) Bond prices converge to the bond's face value due to the time effect, but simultaneously move up and down due to unpredictable changes in bond yields.
• B) As interest rates and bond yields fall, bond prices will rise.
• C) Bonds with higher coupon rates are more sensitive to interest rate changes than otherwise identical bonds with lower coupon rates.
• D) Shorter-maturity zero-coupon bonds are less sensitive to changes in interest rates than are longer-term zero-coupon bonds.

---

Definitions:

Cross-sectional Study

A study format that examines information from a whole population or a representative sample at a particular moment.

Long-term Memory

The storage of information over an extended period, capable of lasting from minutes to a lifetime, encompassing facts, experiences, and skills.

Short-term Memory

A type of memory that holds a small amount of information for a short period, typically seconds to minutes.

Tolerate Sleeplessness

The ability to endure periods without sleep without significant impairment to functions or health.