Which of the Following Statements Is FALSE

question 109

Multiple Choice

Which of the following statements is FALSE?

• A)If the bond trades at a discount,and investor who buys the bond will earn a return both from receiving the coupons and from receiving a face value that exceeds the price paid for the bond.
• B)Most coupon bond issuers choose a coupon rate so that the bonds will initially trade at,or very near to,par.
• C)Coupon bonds always trade for a discount.
• D)At any point in time,changes in market interest rates affect a bond's yield to maturity and its price.

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Definitions:

Willingness-To-Pay

The maximum amount an individual is ready to spend to purchase a good or service or to avoid something undesirable.

Marginal Cost

The price required to create another unit of a good or service.

Advertising Elasticity of Demand

The responsiveness of the quantity demanded of a good to a change in the amount of advertising for that good.

Marginal Cost of Production

The change in total production costs that comes from making or producing one additional item.