Which of the following statements is FALSE?
A)If the bond trades at a discount,an investor who buys the bond will earn a return both from receiving the coupons and from receiving a face value that exceeds the price paid for the bond.
B)Most coupon bond issuers choose a coupon rate so that the bonds will initially trade at,or very near to,par.
C)Coupon bonds always trade for a discount.
D)At any point in time,changes in market interest rates affect a bond's yield to maturity and its price.

Question

Quizplus · Accepted Answer

Coupon bonds do not always trade for a discount. In fact, most coupon bond issuers aim for the bonds to initially trade at or near par, which means they are selling for their face value. If a bond does trade at a discount, the investor would earn a return from receiving coupons as well as from receiving a face value higher than the price paid for the bond. Additionally, changes in market interest rates can affect a bond's yield to maturity and its price at any point in time.

Which of the Following Statements Is FALSE