Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:**Which statement is false?**
A. As the term of a bond approaches zero, the price approaches par.
B. For corporate and government bonds, the coupon payments amortize the principal.
C. Overall, bond prices are less volatile than stock prices.
D. The coupon on a bond is expressed as a percentage of face value.
E. Corporate bonds can be bought and sold in the secondary market.
Expert Solution
Step 1
Corporate Bonds:
- These are bonds issued by the corporation for raising capital. These are considered long-term debt instruments paying coupon payments and par value at the end of maturity to the bondholders.
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