Bonds Miscellaneous Which of the following is FALSE? Assume all else is equal for the two bonds discussed in each choice except for the factor(s) noted The US bond market is LARGER than the US stock market. Assume only the default risk premium and liquidity risk premium matter for interest rates and that the bond rating accurately measures default risk. If the BBB-rated bond's interest rate is 5.00% and the AAA-rated bond's interest rate is 5.50%, then the BBB- rated bond must trade MORE often than the AAA-rated bond and the BBB-rated bond has LESS liquidity risk. Assume there are two bonds and each has an initial yield to maturity of 5%. Also, assume you like to make money. If the economy weakens and the default risk premium rises, you'd want to own a more risky bond where the default risk premium rises MORE than the default risk premium rises for a safer bond. Assume the yield to maturity for two bonds is 5%. If interest rates decline by the same amount for all bonds, you'd want to own a bond with a duration of 10 over a bond with a duration of 5 if you want to make the most money