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.