Which of the Following Statements Regarding Bonds and Their Terms

question 109

Multiple Choice

Which of the following statements regarding bonds and their terms is FALSE?

• A) The amount of each coupon payment is determined by the coupon rate of the bond.
• B) Prior to its maturity date, the price of a zero-coupon bond is always greater than its face value.
• C) The zero-coupon bond has no periodic interest payments.
• D) Treasury bills are U.S. government bonds with a maturity of up to one year.

---

Definitions:

Assignment

The transfer of rights, property, or obligations from one party to another.

Notice

A formal communication or announcement given to inform parties of legal actions, decisions, or the need for response, depending on specific legal or contractual requirements.

Novation

is the act of replacing one obligation with another by mutual agreement, effectively transferring the rights and duties of one party under a contract to another party.