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Which of the following statement(s) are FALSE for a bond? (can be more than one) A. Zero coupon bond is always sold at discount. B.

Which of the following statement(s) are FALSE for a bond? (can be more than one)

A.

Zero coupon bond is always sold at discount.

B.

When the price of a bond decreases suddenly, its yield to maturity increases.

C.

2-year zero coupon Treasury bond has lower interest rate risk compared to a 5-year zero coupon Treasury bond.

D.

When interest rate increases, all bond prices will go down. Therefore, the interest rate risk is the same for all bonds.

E.

A 10-year zero coupon Treasury bond has higher interest rate risk compared to a 10-year Treasury bond with a coupon rate of 6%.

F.

Bond price is just the face value of a bond; it is changing throughout the term of the bond.

G.

When the yield to maturity of a bond is higher than the coupon rate of the bond, the bond is sold at premium.

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