Which of the Following Statements Regarding Bonds and Their Terms

question 19

Multiple Choice

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

• A) Zero-coupon bonds are also called pure discount bonds.
• B) The internal rate of return (IRR) of an investment opportunity is the discount rate at which the net present value (NPV) of the investment opportunity is equal to zero.
• C) The yield to maturity for a zero-coupon bond is the return you will earn as an investor from holding the bond to maturity and receiving the promised face value payment.
• D) When prices are quoted in the bond market, they are conventionally quoted in increments of $1,000.

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Definitions:

Purposive

Having or serving a purpose; intentional or goal-oriented in nature.

Supernormal Stimulus

An exaggerated artificial stimulus that elicits a stronger response than the natural stimulus for which an organism is programmed.

Early Instinct Theories

Theories proposing that behaviors are primarily driven by innate instincts, focusing on the innate, biological determinants of behavior.

Genetic Programs

The predetermined sequences of development and behavior encoded in an organism's DNA.