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Which of the following is FALSE? A. Zero coupon bonds pay no coupons at all, but are offered at a substantial discount below their par
Which of the following is FALSE? A. Zero coupon bonds pay no coupons at all, but are offered at a substantial discount below their par values and hence provide capital appreciation rather than interest income. B. The price of a bond moves in the opposite direction from interest rates; for example, if interest rates rise, bond prices on the secondary market will fall. C. If a company's bonds are selling at a premium, then the YTC is probably the expected return for the investor. D. When ka equals a fixed-rate bond's coupon rate, that bond's current value is equal to par regardless of years to maturity remaining. E For bonds, price sensitivity to a given change in interest rates generally increases as years remaining to maturity decreases.
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