1.)

Which of the following statements is false? A bond trades at par when its coupon rate is equal to its yield to maturity. (\"l The clean price of a bond is adjusted for accrued interest. In The price of the bond will drop by the amount of the coupon immediately after the A c. coupon is paid. If a coupon bond's yield to maturity exceeds its coupon rate, the present value of its A D_ cash ows at the yield to maturity will be greater than its face value. Which of the following is/are generally true of bonds? A bond's return equals the yield to maturity when the time to maturity is the same as A A_ the holding period. A rise in interest rates is associated with a fall in bond prices, resulting in capital gains A B_ on bonds whose terms to maturity are longer than the holding periods. The longer a bond's maturity, the smaller is the size of the price change associated A c. with an interest rate change. Prices and returns for short-term bonds are more volatile than those for longer-term C D_ bonds