Which of the Following Statements Is FALSE

question 89

Multiple Choice

Which of the following statements is FALSE?

• A)A callable bond will trade at a lower price (and therefore a higher yield)than an otherwise equivalent non-callable bond.
• B)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.
• C)Before the call date, investors anticipate the optimal strategy that the issuer will follow, and the bond price reflects this strategy.
• D)The yield to maturity of a callable bond is calculated as if the bond were called at the earliest opportunity.

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