21) Which of the following statement is incorrect?

A)Most secondary market transactions for corporate bonds take place at New York Stock Exchange.

B)As interest rates fall, the prices of bonds increase.

C)Most of the answers are correct except one.

D)Whenever a bond's coupon rate is lower than the market rate of interest on similar bonds, the bond will sell at a discount, and such bonds are called discount bonds.

E)Bonds with a call provision pay higher yields than comparable noncallable bonds.

31. Which of the following statement is incorrect?

A)A call provision gives the firm issuing the bonds the option to purchase the bond from an investor at a predetermined price called as the call price.

B)Most of the answers are correct except one.

C)Whenever a bond's coupon rate is lower than the market rate of interest on similar bonds, the bond will sell at a discount, and such bonds are called discount bonds.

D)Corporate bonds are long-term IOUs that represent claims against a firm's assets.

E)Convertible bonds can be converted into shares of preferred stock at twice of the ratio at the discretion of the common stockholders.

81.Which of the following statements is incorrect?

A)Common stock represents the basic ownership claim in a corporation.

B)Most of the answers are correct except one.

C)Preferred stock with no fixed maturity can be valued as a perpetuity.

D)The bond valuation model cannot be used to value perpetual preferred stock.

E)In primary markets, outstanding shares of stock are bought and sold among investors.