Which of the following statements about zero-coupon bonds is false?
A) When the bonds mature, the issuing firm is faced with a small cash outflow relative to the cash inflow the firm receives when the bonds are initially issued.
B) Zero-coupon bonds have lower interest rate risk than bonds with high coupons.
C) Zero-coupon bonds are an extremely popular way for corporations to borrow money.
D) Most zero-coupon bonds in the United States are government issues.
Correct Answer:
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