Which of the Following Statements Is FALSE

question 22

Multiple Choice

Which of the following statements is FALSE?

• A)Before the call date,investors anticipate the optimal strategy that the issuer will follow,and the bond price reflects this strategy.
• B)The yield to maturity of a callable bond is calculated as if the bond were called at the earliest opportunity.
• C)A callable bond will trade at a lower price (and therefore a higher yield)than an otherwise equivalent non-callable bond.
• D)The price of a callable bond can be low when yields are high,but does not rise above the call value when the yield is low.