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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Definitions:

Dealer Networks

A structured system of intermediaries or distributors that a company uses to retail its products to the end consumers.

Directly

In a straightforward or immediate manner, without any intermediaries or deviations.

Car Manufacturers

Companies that design, assemble, and market vehicles for consumer use, ranging from everyday automobiles to specialized vehicles.

Supply Chain Management

The supervision of goods, data, and funds as they are transferred from the supplier to the maker, then to the wholesaler, followed by the retailer, and finally reaching the consumer.