Which of the Following Statements Is FALSE

question 109

Multiple Choice

Which of the following statements is FALSE?

• A)If the bond trades at a discount,and investor who buys the bond will earn a return both from receiving the coupons and from receiving a face value that exceeds the price paid for the bond.
• B)Most coupon bond issuers choose a coupon rate so that the bonds will initially trade at,or very near to,par.
• C)Coupon bonds always trade for a discount.
• D)At any point in time,changes in market interest rates affect a bond's yield to maturity and its price.

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Definitions:

Limited Information

Situations where the data or knowledge available is insufficient or incomplete.

Risk Propensity

The inclination or tendency of an individual or organization to take risks or engage in behaviors with uncertain outcomes.

Anticipated Outcomes

The expected results or consequences of an action or decision, based on predictive analysis or foresight.

Bounded Rationality

A concept that decision-makers are limited by their information, cognitive limitations, and time constraints when making choices.