Which of the Following Statements Is FALSE

question 72

Multiple Choice

Which of the following statements is FALSE?

• A)Given the spot interest rates,we can determine the price and yield of any other default-free bond.
• B)As the coupon increases,earlier cash flows become relatively less important than later cash flows in the calculation of the present value.
• C)When the yield curve is flat,all zero-coupon and coupon-paying bonds will have the same yield,independent of their maturities and coupon rates.
• D)When U.S.bond traders refer to "the yield curve," they are often referring to the coupon-paying Treasury yield curve.

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Definitions:

Entry Barriers

Obstacles that prevent or hinder new competitors from easily entering an industry or market.

Inverted-U Theory

A hypothesis suggesting that a variable can produce effects that increase to a point after which further increases in the variable lead to a decline in the effect.

Industry Concentration Ratios

Statistical measures that express the extent to which a small number of firms dominate the total output, sales, or capacity in an industry.

R&D

Research and Development; a dedicated business or policy activity aimed at investing in new knowledge, product development, and innovation improvement.