Which of the Following Statements Is FALSE

question 44

Multiple Choice

Which of the following statements is FALSE?

• A) When a bond is trading at a discount, the price drop when a coupon is paid will be larger than the price increase between coupons, so the bond's discount will tend to decline as time passes.
• B) When a bond trades at a price equal to its face value, it is said to trade at par.
• C) As interest rates and bond yield rise, bond prices will fall.
• D) Ultimately, the prices of all bonds approach the bond's face value when the bonds mature and their last coupon are paid.

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Definitions:

Total Utility

The complete fulfillment gained through the consumption of a certain amount of a product or service.

Total Utility

The overall satisfaction or value that a consumer derives from consuming a certain quantity of goods or services.

Indifference Curve

A graph representing a series of combinations of two goods between which a consumer is indifferent, showing the trade-offs a consumer is willing to make between two products.

Total Utility

The complete fulfillment obtained from the consumption of a specified quantity of goods or services.