Which of the Following Statements About Zero-Coupon Bonds Is False

question 39

Multiple Choice

Which of the following statements about zero-coupon bonds is false?

• A)When the bonds mature, the issuing firm is faced with a small cash outflow relative to the cash inflow the firm receives when the bonds are initially issued.
• B)Zero-coupon bonds have lower interest rate risk than bonds with high coupons.
• C)Zero-coupon bonds are an extremely popular way for corporations to borrow money.
• D)Most zero-coupon bonds in the United States are government issues.

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