ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements is FALSE regarding bonds?
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If the par value is lower than the market price, then the yield-to-maturity must be lower than the coupon rate.
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If the market price is lower than the par value, then the coupon rate must be lower than the yield-to-maturity.
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Both A and B are false.
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None of the above are false.
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Explanation:
Detailed explanation-1: -Answer and Explanation: The FALSE option is A) Prices of bonds with lower durations are more sensitive to interest rate changes. This statement is false because the prices of bonds with lower durations are NOT more sensitive.
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