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Which of the following statements is FALSE? Simple interest is charged on bank bills while compound interest is applied on bonds. A bond with a

Which of the following statements is FALSE?

  1. Simple interest is charged on bank bills while compound interest is applied on bonds.
  2. A bond with a coupon rate of 10% and yield of 12% will sell at a discount.
  3. If XYZ Corp's $1,000 8% bond with 10 years to maturity is selling at $960, the yield is less than 8%.
  4. Prices of longer maturity bonds are more sensitive to interest rate changes.

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