Which of the Following Statements Is FALSE

question 60

Multiple Choice

Which of the following statements is FALSE?

• A)A bond trades at par when its coupon rate is equal to its yield to maturity.
• B)The clean price of a bond is adjusted for accrued interest.
• C)The price of the bond will drop by the amount of the coupon immediately after the coupon is paid.
• D)If a coupon bond's yield to maturity exceeds its coupon rate,the present value of its cash flows at the yield to maturity will be greater than its face value.

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Definitions:

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific date, showing assets, liabilities, and shareholders’ equity.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of a business.

Periodic Inventory System

An accounting method where inventory values and cost of goods sold are determined at the end of an accounting period.

Merchandise Inventory

refers to the goods available for sale to customers in the retail and wholesale industries.