Question
Two of the following four statements are false. Identify all the false statements. Explain why according to you, the statements are false: A) If the
Two of the following four statements are false. Identify all the false statements. Explain why according to you, the statements are false:
A) If the govt bond yield curve shifts up then the government bond prices will increase
B) Consider two bonds A and B with same: maturity, face value, yield and coupon rates but different coupon frequencies. If Bond A pays annual coupons and Bond B pays semi annual coupons. It must be true that the price of Bond B is less sensitive to changes in interest rates.
C) In 2020, for the most part, the real short-term interest rates (less than 10 Year Maturity) in the United States have been positive but close to zero.
D) If the rate at which our money in the bank grows is less than the rate at which prices grow, it implies that the real interest rates must be negative.
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