Which of the Following Statements Is FALSE

question 78

Multiple Choice

Which of the following statements is FALSE?

• A)Because we can convert any bond price into a yield, and vice versa, bond prices and yields are often used interchangeably.
• B)One advantage of quoting the yield to maturity rather than the price is that the yield is independent of the face value of the bond.
• C)Unlike the case of bonds that pay coupons, for zero-coupon bonds, there is no simple formula to solve for the yield to maturity directly.
• D)The internal rate of return (IRR)of an investment in a bond is given a special name, the yield to maturity (YTM).

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Definitions:

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increase in the demand for the other.

Demand

The measure of a good or service that patrons are eager and able to procure, across various pricing, throughout a certain duration.

Price Ceiling

A legally established maximum price for a good, or service. Normally set at a price below the equilibrium price.

Sellers

Individuals or entities that offer goods or services for sale in the market, playing a key role in determining the supply conditions.