Which of the following statements regarding bonds and their terms is FALSE?

A.

The yield to maturity of a bond is the discount rate that sets the future value (FV) of the promised bond payments equal to the current market price of the bond.

B.Financial professionals also use the term spot interest rates to refer to the

defaultfree

zerocoupon

yields.

C.

When we calculate a bond's yield to maturity by solving the formula,

Price of an

nperiod

bond =

Coupon(1 + )1

+

Coupon(1 + )2

+ ... +

Coupon + Face(1 + )n,

the yield we compute will be a rate per coupon interval.

D.The internal rate of return (IRR) of an investment in a

zerocoupon

bond is the rate of return that investors will earn on their money if they buy a

defaultfree

bond at its current price and hold it to maturity.