Question $18$

Which one of the following statements concerning bond yields or bond prices is

FALSE?

A$)$ The bond yield is likely to increase if the expected rate of inflation rises.

B$)$ A credit rating upgrade is likely to lead to a fall in the price of the upgraded

bond.

C$)$ A $10$ year Treasury bond issued with a face value of $$1000$ and a coupon of $$40$

will fall in price if the next day a new $10$ year Treasury bond with an identical

face value is sold with a coupon of $$50.$

D$)$ A bond with $5$ years to maturity will tend to fluctuate less is price than a bond

with $10$ years to maturity as bond yields fluctuate, other things being equal.