Which of the Following Statements Regarding Bonds and Their Terms

question 19

Multiple Choice

Which of the following statements regarding bonds and their terms is FALSE?

• A) Zero-coupon bonds are also called pure discount bonds.
• B) The internal rate of return (IRR) of an investment opportunity is the discount rate at which the net present value (NPV) of the investment opportunity is equal to zero.
• C) The yield to maturity for a zero-coupon bond is the return you will earn as an investor from holding the bond to maturity and receiving the promised face value payment.
• D) When prices are quoted in the bond market, they are conventionally quoted in increments of $1,000.

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