1.)

Which of the following statements is false? Bond prices converge to the bonds face value due to the time effect, but \"A. simultaneously move up and down due to unpredictable changes in bond yields. As interest rates and bond yields fall, bond prices will rise. (3. Bonds with higher coupon rates are more sensitive to interest rate changes. bl Shorter maturity zero-coupon bonds are less sensitive to changes in interest rates A D_than are longer-term zero-coupon bonds. Consider the following two projects with cash flows in dollars ($): Year 0 Year 1 Year 2 Year 3 Year 4 Cash Cash Cash Cash Cash Discount Project Flow Flow Flow Flow Flow Rate A -100 40 50 60 N/A .15 B -73 30 30 30 30 .15 Assume that projects A and B are mutually exclusive. The correct investment decision and the best rationale for that decision is to: invest in project A since NPVB IRRA. invest in project B since NPVB > NPVA. (\"N invest in project A since NPVA > 0. (\"N