Choose a wrong Statement about bonds.

Zero-coupon bonds always trade at discount and will converge over time to their par

values.

Bonds are usually issued at par and trade at discount, premium, or par depending on

the market interest rate (YTM).

If a 3-year bond pays a $50 annual coupon on a $1,000 par value and trades at a 3%

YTM, then this bond probably trades at premium.

In anticipation of an overall decline in the market interest rate, it is advantageous to

invest in relatively short-term bonds.

Due to inflation and price risk, the YTM of Treasury bonds tends to be higher with a

longer maturity.