Which of the following statements is true?

I. Value of perpetual bond $=$ coupon payment $\frac{?}{r},$ which does not depend on the time period $t,$

but does depend on the interest rate $r.$

II$.$ Bond prices are inversely related to the yields to maturity, but are not related to the coupon

rates. Coupon rates are only used to calculate the coupon payments.

III. The value of the bond with the lower coupon will depend more on the future payment of its

face value, which, because of the longer period until payment, is more sensitive to interest rate

changes.

Select one:

a$.$ I only

b$.$ I and II only

c$.$ I and III only

d$.$ II and III only

e$.$ I, II and III