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.

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Definitions:

Tax

A mandatory financial charge imposed by a governmental organization on individuals or entities to fund public expenditures.

Slightly Inelastic

A situation where a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Demand for Product

The total amount of a product or service that consumers are willing and able to purchase at various price levels, at a given time.

Advertisers

companies or individuals who pay to promote their products or services, typically through various media channels.