Question

Which of the following statements is? FALSE? A. The simplest type of bond is a zero?coupon...

Which of the following statements is? FALSE?
A. The simplest type of bond is a zero?coupon bond.
B. Prior to its maturity? date, the price of a zero?coupon bond is always greater than its face value.
C. The amount of each coupon payment is determined by the coupon rate of the bond.
D. Treasury bills are U.S. government bonds with a maturity of up to one year.

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Answer #1

The False Statement is " B. Prior to its maturity? date, the price of a zero?coupon bond is always greater than its face value "

The Price of a Zero Coupen Bond will always be less than it's face value or Par Value irrespectice of it's maturity date. Since the Price of a Bond is calculated by discounting the Face Value or It's Par Value by it's Yield To Maturity [YTM] or the Market Rate

All other remaming following statements are TRUE

The simplest type of bond is a zero?coupon bond.

The amount of each coupon payment is determined by the coupon rate of the bond.

Treasury bills are U.S. government bonds with a maturity of up to one year.

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